# Trump Rejects Iran's Hormuz Proposal and Keeps Further Strikes Open, Pushing Brent Above $106

Tehran says it will not ease its conditions, the ten-year United States Treasury yield stands near 5.2%, and South Korea's KOSPI fell more than 2% at the open.

- Published: 2026-09-28T05:13:14.945Z
- Canonical: https://polylog.news/2026-09-28/trump-rejects-iran-s-hormuz-proposal-and-keeps-further-strik
- Publisher: Polylog (Global desk)
- Section: markets
- Sources: [The Hindu](https://www.thehindu.com/news/international/iran-stands-firm-on-hormuz-plan-after-us-rejection/article71517156.ece), [Dawn](https://www.dawn.com/news/2033148/us-iran-may-return-to-table-within-days-over-hormuz), [CoinDesk](https://www.coindesk.com/markets/2026/09/28/bitcoin-and-nasdaq-futures-decline-as-trump-won-t-rule-out-more-iran-strikes), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001557664#utm_source=RSS)

President Donald Trump turned down Iran's proposal to reopen the Strait of Hormuz within seven days. He said on Sunday that he expects American negotiators to meet Iranian counterparts this week, and he declined to rule out further military strikes before November's midterm elections. He also said the war could end soon. Iranian Foreign Minister Abbas Araghchi said Tehran [will not ease the conditions attached to the plan](https://www.thehindu.com/news/international/iran-stands-firm-on-hormuz-plan-after-us-rejection/article71517156.ece). Those conditions include a halt to hostilities across the region, including Lebanon, a return to the terms of the ceasefire that collapsed earlier this year, the release of frozen Iranian assets, and waivers on oil sanctions.

The two sides also disagree about what happened at sea. Iran's Revolutionary Guard said it had captured an American underwater drone in the strait, a claim [the Pentagon denied](https://www.dawn.com/news/2033148/us-iran-may-return-to-table-within-days-over-hormuz), according to Dawn's account of the weekend exchanges. Araghchi separately said the United States ambassador handling the file had not read the proposal.

Energy prices moved first. Brent crude rose about 1.8% to trade above $106 a barrel, and United States crude for November delivery rose about 1.3% to roughly $93.62, [according to CNBC's market report](https://www.cnbc.com/2026/09/28/oil-price-today-wti-brent-trump-iran.html). Bond and equity markets moved for the same reason. The ten-year Treasury yield stood near 5.20%, a level CoinDesk notes is [the highest since 2007](https://www.coindesk.com/markets/2026/09/28/bitcoin-and-nasdaq-futures-decline-as-trump-won-t-rule-out-more-iran-strikes) and about 127 basis points above where it stood when the war began in early March. Nasdaq futures traded 0.7% lower, and bitcoin fell 1.3% to $83,324.

The pressure spread into Asian stock indices weighted toward semiconductor makers. Israeli business daily Globes reported [Seoul falling more than 2% with Samsung and SK Hynix leading declines](https://www.globes.co.il/news/article.aspx?did=1001557664#utm_source=RSS) as oil prices and American bond yields rose together. South Korea's KOSPI stood at 6,936.34 in late morning, down 2.04% from its pre-holiday close of 7,080.92, with Samsung Electronics off 2.10% and SK Hynix off 2.69%, [Aju Press reported](https://www.ajupress.com/view/20260928110201414). The Nikkei 225 rose 0.84%. A single mechanism links these moves: a physical constraint on crude supply raises expected inflation at a moment when the Federal Reserve is already tightening, so long-term bond prices fall and the equities most sensitive to discount rates fall with them.

## What this means

A blocked strait removes oil barrels that no inventory release can replace. The shock therefore arrives as a price increase rather than a physical shortage, and it hits energy importers and semiconductor exporters at the same time. Investors holding long-duration bonds and rate-sensitive Asian manufacturers lose as discount rates rise. Gulf oil producers with export routes outside the strait, along with oil-linked equities, gain. The Federal Reserve under its chair, Kevin Warsh, loses the option of treating this energy-driven inflation as temporary, since it already raised rates in September. Both governments want the sequencing to favor them: Iran wants asset releases and sanctions relief before it reopens the strait, Washington wants the strait reopened before it makes concessions, and neither side can move first without losing leverage. The precedent is the 2022 European gas disruption, where partial supply returned only after prices had already reset the entire forward curve. The likelier outcome is that talks resume within weeks and produce another narrow, reversible arrangement, leaving a war premium in crude through the American midterms. A verified ceasefire that includes Lebanon, followed by tanker traffic returning to pre-war volumes, would prove this outlook wrong.

## What to watch

- Whether the first steps of Iran's seven-day sequence begin at all, since the plan's credibility rests on the early confidence-building days rather than the reopening itself.
- Tanker insurance quotes and loading schedules at Gulf terminals, which show whether shipowners believe the strait will reopen or are pricing an extended closure.
- The ten-year Treasury yield relative to oil, because yields rising alongside crude indicate investors are interpreting the shock as persistent inflation rather than a temporary spike.