This photo obtained from Iran’s ISNA news agency and taken on May 2, 2026, shows the Gambian-flagged tanker Biri anchored in the Strait of Hormuz off the coast of Bandar Abbas in southern Iran. (Photo courtesy of Amirhossein KHORGOOEI / ISNA / AFP via Getty Images) /
Amirhossein Kolgouei | AFP | Getty Images
US President Donald Trump has rejected as “totally unacceptable” Iran’s counter-offer to end the 10-week Middle East war, while vowing Tehran “will never give in”, prolonging the standoff that has blocked the Strait of Hormuz and rattled global energy markets.
“I read the response from Iran’s so-called ‘representatives.’ I don’t like it, it’s totally unacceptable!” the president said in a Truth social post on Sunday.
Iranian state media framed the Iranian government’s response as a rejection of the US offer, characterizing it as a demand for “surrender”. In response to the latest US proposals, the Iranian government has insisted on war reparations, full sovereignty over the Strait of Hormuz, an end to sanctions, and the release of frozen Iranian assets.
As negotiations progressed on Sunday, Iranian President Massoud Pezeshkian struck a defiant tone. “We will never bow before our enemies. Even if there is talk of dialogue or negotiations, it does not mean surrender or withdrawal,” he said in Farsi on X, translated via Grok.
Israeli Prime Minister Benjamin Netanyahu said in an interview on CBS’s “60 Minutes” that the war is not over because “there is still work to be done.” He said Iran has not delivered enriched uranium or removed enrichment facilities and continues to support regional proxies and advance its ballistic missile program.
Nuclear and Hormuz impasse
The Wall Street Journal reported that Iran has rejected US demands for its nuclear program and highly enriched uranium stockpile. Instead, Tehran proposed separate negotiations, offering to dilute some of the highly enriched uranium and transfer the rest to a third country, with the condition that it be returned if Washington ultimately pulls out of the deal, the newspaper reported.
The United States wants guarantees that Iran will halt its nuclear program as part of a peace deal. Iran has reportedly agreed to halt uranium enrichment, but for a shorter period than the 20-year moratorium proposed by the United States, and Iran refuses to dismantle its nuclear facilities.
The Iranian government is also demanding that the United States lift the blockade of Iranian ports as a condition for opening the Strait of Hormuz.
A Qatari liquefied natural gas tanker passed through the strait on Sunday for the first time since the start of the war, which was reportedly approved by Iran to build trust between Qatar and Pakistan, but the symbolic opening did little to allay broader market concerns.
“Oil prices remain highly sensitive to headlines, with markets caught between hopes for easing tensions and the risk that sporadic clashes will continue to embed an energy risk premium into currencies and interest rates,” said Christopher Wong, currency strategist at OCBC Bank.
On Monday, U.S. West Texas Intermediate crude oil futures (for June delivery) rose 4.96% to $100.3 a barrel, while international benchmark Brent crude oil futures (for July delivery) rose 4.92% to $105.76 a barrel.
Iran continued its drone attacks on its Gulf neighbors over the weekend. The United Arab Emirates said it had intercepted two drones from Iran, Qatar condemned a drone attack on a cargo ship in its territorial waters, and Kuwait said its air defenses encountered an enemy drone that entered its airspace.
Iranian military spokesperson Brig. In an interview with IRNA, General Mohammad Akraminia warned of “surprising options” if the adversary made further “miscalculations” and said any future invasion would take the conflict into areas “where the enemy does not expect it.”
Iran’s new supreme leader Mojtaba Khamenei, who has not been seen in public since the start of the war, has also issued “new and definitive directives” on military operations, state television reported without giving details.
Focus on Beijing
Unresolved tensions hang over the summit between President Trump and Chinese President Xi Jinping scheduled for later this week in Beijing, where the Iran war is likely to be a focus.
Washington is trying to pressure China to rely on Iran to reopen the strait, but China’s willingness to act as a pressure mechanism remains unclear.
Ben Emmons, managing director at FedWatch Advisors, said the base case is “managed détente with potentially limited success,” likely amounting to vague joint language on de-escalating tensions and keeping oil flowing.
Emmons said China shares the U.S. interest in a stable Hormuz, but could not imagine making concessions that would undermine its partnership with Iran or risk reputational exposure from failed mediation.
In a high-profile diplomatic overture, Beijing hosted Iranian Foreign Minister Abbas Araghchi last week, with China’s top diplomat Wang Yi reaffirming the “strategic partnership” between the two countries and urging Tehran to seek diplomatic solutions to regional disputes and refrain from hostile relations.
