Oil prices rise as Trump rejects Iranian proposal to reopen Strait of Hormuz

Oil prices rose on Monday after U.S. President Donald Trump rejected a conditional Iranian peace proposal aimed at ending the Middle East conflict and reopening the strategically vital Strait of Hormuz.

International benchmark Brent crude futures with November expiry traded 2.7% higher at $107.11 per barrel at 8:32 a.m. ET, paring gains after climbing as high as $108.83 earlier in the session. U.S. West Texas Intermediate futures with November expiry were last seen 3% higher at $95.20.

It comes shortly after Trump turned down Iran's conditional offer to reopen the Strait of Hormuz and told aides he expects U.S. strikes on the country to resume after November's midterm elections, The Wall Street Journal reported Saturday, citing unnamed U.S. officials.

Trump later confirmed to reporters that he had rejected Tehran's latest proposal: "They made a proposal but I rejected it."

Separately, Yemen's Saudi-led coalition said on Saturday it had intercepted projectiles launched by Iran-backed Houthi rebels.

Iranian Foreign Minister Abbas Araghchi on Friday offered to reopen the key shipping route and restart nuclear negotiations with Washington within seven days, if the Trump administration agreed to Tehran's conditions.

"If certain conditions are met, the Strait of Hormuz will be open at the end of seven days, and talks will be restarted," Araghchi told reporters on the sidelines of the United Nations General Assembly in New York.

Those conditions include an end to what Tehran describes as U.S. "acts of aggression," the lifting of the naval blockade and economic warfare, and the release of Iranian assets, according to Iranian foreign ministry spokesman Esmaeil Baghaei.

Trump said earlier this month that he expected the conflict, which began with U.S. and Israeli airstrikes on Iran on Feb. 28, to conclude soon after the midterm elections, with oil prices subsequently declining.

Energy market participants, however, are pricing in a "clear and present danger" of a return to U.S.-Iran hostilities after the midterm elections, according to Cornelia Meyer, CEO of Meyer Resources.

"I think everybody hopes that this is not the case because, you know, we are living off borrowed barrels. A lot of countries are living off their inventories," Meyer told CNBC's "Access Middle East" on Monday.

— CNBC's Azhar Sukri contributed to this report