President Donald Trump on Saturday, September 26, publicly rejected an Iranian proposal to reopen the Strait of Hormuz and resume nuclear negotiations within seven days, calling the deal "not acceptable" and sending oil prices surging past $107 a barrel. The rejection — delivered in remarks to reporters as Trump departed the White House — deepened a months-long confrontation that has already reshaped global energy markets.
The proposal, presented by Iranian Foreign Minister Abbas Araghchi and conveyed to Washington through Qatari mediators, offered Tehran's most concrete diplomatic roadmap since the conflict began. According to reporting by the Wall Street Journal and others, Iran offered to reopen the strait and restart nuclear talks within seven days if Washington agreed to halt hostilities on all fronts including Lebanon, release more than $12 billion in frozen Iranian overseas assets, lift sanctions on Iranian crude, and end its naval blockade of Iran.
Trump dismissed the terms outright.
"I rejected their deal. They want to make a deal where they open the strait immediately because they're losing so badly." — President Donald Trump, September 26, 2026
He added, "I like making a deal, too. But, I'm not — that deal would not be acceptable," while saying the U.S. already had "total control" of the strait, with "massive amounts of oil" passing through it.
A strait at the center of the conflict
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, and under normal conditions carries roughly a fifth of the world's internationally traded petroleum. The waterway has become the central battlefield in the confrontation between the United States and Iran that escalated sharply in February, when the U.S. and Israel launched joint strikes on Iranian targets.
Iran disrupted traffic through the strait earlier this year in response to those strikes, contributing to sharp increases in oil and refined-fuel prices around the world. The United States subsequently established a naval blockade targeting Iranian oil exports while providing military protection for commercial traffic. The White House said in August that U.S. forces had cleared mines from international shipping lanes and escorted large numbers of commercial vessels through the strait while preventing Iran from exporting oil under the blockade.
Middle Eastern oil exports have since recovered substantially from their wartime lows, with shipments through Hormuz and alternative routes approaching 80 percent of prewar regional flows, according to shipping-data analysis cited by the Wall Street Journal. But the underlying conflict — and the strait's status — remains unresolved.
Markets convulse
Financial markets reacted immediately to the collapse of the proposal. Brent crude futures climbed toward $107–108 a barrel as traders priced in the prospect of renewed U.S. strikes. U.S. stocks fell across the board after the rejection: the Dow Jones Industrial Average closed down 0.67 percent, the S&P 500 fell 0.77 percent, and the Nasdaq dropped 0.92 percent, according to the Seoul Economic Daily.
The rejection also triggered another round of selling in U.S. Treasuries. The yield on the 10-year note — the benchmark for global interest rates — reached 5.274 percent, its highest level since the 2007 global financial crisis, while the 30-year yield climbed as high as 5.583 percent, the highest since 2004, as inflation concerns spread.
Gulf equity markets were mixed on Monday, Reuters reported, with Qatar's index declining 0.6 percent and Saudi Arabia's benchmark slipping 0.4 percent, while Dubai and Abu Dhabi posted modest gains. National average U.S. gasoline prices hit $4.48 a gallon on Monday, the New York Post reported. Trump said Sunday he was "very seriously" considering a ban on diesel exports in order to fight soaring prices.
The weekend's diplomatic maneuvering highlighted how indirect the U.S.–Iran channel has become. Iran put its framework forward through Qatari intermediaries, and Iran's foreign minister acknowledged Trump's comments in a post on Telegram while saying Tehran would wait for an official response from the mediators before making a decision.
Araghchi wrote that Trump "has made many good statements, as well as many contradictory ones, which unfortunately we hear frequently," adding that Iran would await the "definitive views" of mediators. He has described the seven-day plan as a "very reasonable plan on the table."
In an interview with NBC's "Meet the Press" aired Sunday, Araghchi struck a dual tone — defiance and openness in the same breath:
"We stand firm in the face of any aggression against us, even when it comes to a doomsday war. At the same time, we are ready for diplomacy." — Iranian Foreign Minister Abbas Araghchi, NBC "Meet the Press," September 27, 2026
The regional picture added to the weekend's turbulence. A Saudi-led coalition intercepted a barrage of Houthi ballistic missiles and drones targeting Saudi Arabia, Reuters reported. Meanwhile, Saudi Foreign Minister Prince Faisal bin Farhan arrived in Washington on Monday for talks with U.S. Secretary of State Marco Rubio — a sign that Gulf capitals are working every channel available to prevent escalation.
What comes next
The near term offers both risk and possibility. Trump told Axios that he expects talks with Iran this week, even as he rejected Tehran's specific proposal — suggesting the door is not closed so much as the terms are unacceptable. Iranian officials, for their part, have said an agreement could be reached "if the necessary conditions are met," pointing to a memorandum of understanding signed by the two countries in June.
But darker reports are circulating as well. The Wall Street Journal reported that Trump was skeptical Iran would meet his demands and had told his staff that he saw a renewed bombing campaign as probable — with some reports suggesting he expects to resume strikes after the midterm elections. Earlier this month, Trump publicly said he expected the Middle East conflict to end soon after the midterms and for oil prices subsequently to nosedive.
For consumers, businesses, and governments from Europe to Asia, the stakes are direct: energy prices, inflation, and shipping costs all hinge on whether the strait stays open. For now, the oil keeps flowing through a waterway that sits at the intersection of war and diplomacy — and the world is watching to see which one prevails.
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