Iran Rejects U.S.-Backed Ceasefire as Trump Escalates Military Threats, Oil Tops $100

Iran has rejected a U.S.-backed ceasefire proposal delivered by Iraqi Prime Minister Ali al-Zaidi, opting against a temporary truce as tensions with the United States continue to escalate, according to a New York Times report citing Iranian and Iraqi officials.

The reported rejection comes as the confrontation between Washington and Tehran has intensified in recent weeks, raising concerns about a broader regional conflict and its impact on global energy markets.

On Thursday, President Donald Trump warned Iran and its Houthi allies of "major military punishment" following attacks by the Yemen-based group on two Saudi oil tankers in the Red Sea. The incident opened a second major maritime flashpoint alongside the Strait of Hormuz, heightening fears of disruptions to global oil shipments.

Those concerns pushed Brent crude above $100 per barrel for the first time since May after prices surged more than 6%, reflecting growing anxiety over the security of key energy shipping routes.

According to the report, Iranian officials rejected the ceasefire proposal because it did not address the long-term issue of control over the Strait of Hormuz, a vital chokepoint through which a significant share of the world's oil supply passes. The proposal was reportedly the only active ceasefire initiative under consideration.

The mediation effort followed al-Zaidi's meetings at the White House before traveling to Tehran, where he held talks with Iranian President Masoud Pezeshkian, Foreign Minister Abbas Araghchi, and other senior officials.

Araghchi reportedly said Iran did not require additional mediators, arguing that the main obstacle to negotiations is Washington's approach rather than a lack of diplomatic communication.

The report also said Tehran is preparing for the possibility of a wider military conflict if the United States carries out threats to strike Iranian territory or critical infrastructure.

In such a scenario, Iran could respond by expanding the conflict beyond its borders, including targeting Tel Aviv and encouraging its Houthi allies to disrupt shipping through the Bab al-Mandab Strait, another strategic waterway connecting the Red Sea and the Gulf of Aden. Such developments could further threaten global energy supplies and increase volatility across oil markets.