Energy markets spike as Trump rebuffs Iran truce, US yields rise on inflation fears

Gas prices at a Shell gas station above US$6 a gallon for regular gasoline and US$8 a gallon for diesel are displayed across from a US flag outside of the Marathon Petroleum Corp. Los Angeles Refinery in Carson, California on September 22, 2026. — AFP pic

First Published: Monday, 28 Sep 2026 7:59 PM MYT

LONDON, Sept 28 — Oil futures surged more than four per cent today, alongside gains for natural gas and diesel prices, after US President Donald Trump rejected Iran’s offer of a seven-day truce.

High inflation concerns lifted government bond yields as markets bet on the US Federal Reserve hiking interest rates in October after already tightening this month, supporting the dollar.

European stock markets steadied in midday deals after a mixed showing across Asia, with markets also reacting to Washington and Beijing extending their trade truce at the end of last week.

“There was renewed strength in oil prices after comments from President Trump that he had rejected Iran’s latest proposal to reopen the Strait of Hormuz,” noted AJ Bell investment director Russ Mould.

With no sign of an imminent end to the US-Israel-Iran war, European natural gas prices also won support on Monday, while average diesel prices in the UK hit a record high just shy of £2 (RM10.83) per litre, according to the RAC motoring organisation.

On the downside, “gold prices have slumped from their summer highs as investors have reacted to the stronger dollar — which makes the metal more expensive for non-dollar buyers”, Mould explained.

Iran set out a plan at the United Nations General Assembly last week for a halt in hostilities that would see the Strait of Hormuz reopened, easing a crippling supply crisis that has jacked up global costs.

The waterway is key to the world’s energy supply and is now central to the conflict between the US and Iran, particularly with Houthis seizing Yemen’s entire Red Sea coast, including the Bab al-Mandab Strait, a vital shipping lane.

Iran was standing by its conditions for reopening the Strait, including the release of frozen assets, the lifting of sanctions on its oil and an end to the United States’ naval blockade.

Key figures at around 1030 GMT 

Brent North Sea Crude: UP 4.1 per cent at US$108.65 per barrel

West Texas Intermediate: UP 4.2 per cent at US$96.31 per barrel

London — FTSE 100: UP 0.2 per cent at 10,716.42 points

Paris — CAC 40: FLAT at 8,079.88

Frankfurt — DAX: DOWN 0.2 per cent at 25,372.68

Tokyo — Nikkei 225: DOWN 0.7 per cent at 65,877.62 (close)

Hong Kong — Hang Seng Index: UP 0.5 per cent at 24,642.51 (close)