Oil prices rebounded over 2% on Monday after US President Donald Trump rejected an Iranian peace proposal aimed at easing Middle East tensions and reopening the Strait of Hormuz.
Brent futures rose $2.60, or 2.49% to $106.92 a barrel at 0803 GMT while US West Texas Intermediate crude was at $94.49 a barrel up $2.08 or 2.25%.
Iran transmitted the peace plan to Washington via Qatari mediators at the UN General Assembly. Although Trump turned down the offer also he noted that US negotiators plan to engage in further talks this week.
Geopolitical risks remain high following fresh attacks on Saudi Arabia. The Saudi-led coalition intercepted two ballistic missiles and two drones launched by Iran-backed Houthi forces over the weekend, keeping regional supply flows vulnerable.
Meanwhile the global supply remains under pressure due to surging diesel prices and potential US export restrictions. Analysts warn that any US curbs on diesel exports could tighten supply globally and drive up European energy prices.
Offsetting some supply concerns, preliminary Kpler data shows Middle East crude exports rebounded in September to 12.8 million barrels per day (bpd) the highest level since February.
The recovery was driven by increased shipments from Saudi Arabia and the UAE through the Strait of Hormuz following a diversion of exports away from Red Sea routes previously damaged by attacks.
