08:42 AM EDT, 05/11/2026 (MT Newswires) -- Oil prices rose early on Monday after the United States rejected Iran's response to its peace proposal, calling it unacceptable, continuing the war that has produced the largest-ever energy supply shock.

West Texas Intermediate crude oil for June delivery was last seen up US$2.92 to US$98.34 per barrel, while July Brent oil was up US$2.93 to US$104.33.

Iran replied to a U.S. peace offer last week with a plan of its own, delivering a response on Sunday that included demands for compensation for war damages, acknowledgement of its control of the Strait of Hormuz, an end to Israel's war on Lebanon and the removal of sanctions on it oil exports and nuclear enrichment program.

Iran's demands were dismissed by U.S. President Trump. who called the demands "totally unacceptable" in a social media post.

The war launched by the United States and Israel is now in its tenth week, leaving the Strait of Hormuz closed to tankers that delivered 20% of daily demand for oil, LNG and refined products. Iran's blockade of the Strait has forced Asian nations that rely on Persian Gulf imports to bid up spot prices for oil, caused shortages of aviation fuel and raised inflation as gasoline costs climb.

"The two sides continue to maintain a fragile ceasefire while the effective closure of the Strait of Hormuz drags on. After briefly trading down to USD 96 last week on renewed hopes the strait would reopen, Brent has rebounded above USD 105. Morgan Stanley has described the situation as a "race against time," warning that recent mitigating factors - such as a surge in U.S. exports (+3.8 mb/d YoY over the past 30 days) and weaker Chinese imports (-5.5 mb/d) - cannot persist indefinitely. That increasingly leaves demand destruction through slower consumption growth and higher prices as the only viable mechanisms to rebalance the market," Saxo Bank wrote.