London, 28 September 2026 — EBM Newsdesk Analysis — By Anthony Gill
On Monday 28 September, oil climbed towards $108 a barrel, pulling down global bonds and stocks, after Donald Trump rejected Iran’s proposal to reopen the Strait of Hormuz. Brent was trading around $106.65 in early London, up 2.3%, having jumped almost 3% in Asia. The most telling detail came from The Wall Street Journal, which reported that Trump told aides he expects US strikes on Iran to resume after November’s midterm elections. For a Europe already paying for a war it isn’t fighting, the question is now how long the bill keeps running.
Markets had spent last week pricing in a deal. That hope is now fading, and Europe is the region least able to absorb the delay. It imports most of its energy, its central bank has already raised rates twice this year, and its governments are borrowing at the highest costs in more than a decade. Every extra week the strait stays shut is paid for in European inflation, interest rates and budgets.
What Iran Offered and Why Trump Said No
Iran’s offer came at the United Nations General Assembly in New York. Foreign minister Abbas Araghchi said the strait could reopen within seven days if certain conditions were met, with nuclear talks restarting afterwards. Those conditions included lifting the US naval blockade, ending what Tehran calls acts of aggression, and releasing frozen Iranian assets.
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SubscribeTrump dismissed it bluntly, telling reporters on Saturday that Iran had made a proposal but he had rejected it. His administration believes it is winning. One US official said Washington controls the strait and is “not in a rush”. Iran says it is still waiting for a formal response through mediators, so talks are not dead, but they have clearly stalled.
Why the Oil Price Matters More Than the Headline
The daily moves hide the bigger picture. Brent is up more than 71% since January, and the conflict has now spread beyond Iran. Renewed fighting in Yemen has closed the Bab el-Mandeb Strait, at the mouth of the Red Sea, to Saudi-flagged tankers. The US has been escorting ships out of the Gulf, but oil and gas supplies remain well below their pre-war levels.
For Europe, a longer war means a longer squeeze. Higher oil feeds straight into inflation, which forces the ECB to keep rates high, which pushes up government borrowing costs. That is why bonds fell alongside stocks on Monday. The global bond sell-off and the oil price are now the same story.
Who Feels It First
The timing could hardly be worse for Paris. France publishes its draft 2027 budget on Wednesday, with its interest bill already rising faster than defence spending. Higher yields make those numbers worse before the ink is dry.
Airlines are next in line. Their fuel hedges were written for a war that would end this year, and a conflict running into 2027 leaves the weakest carriers exposed. It strengthens the case that Europe’s loss-making airlines will fail once that cover runs out.
What Comes Next
My view is that markets have been too quick to price in peace every time a proposal surfaces. Monday’s move corrects that. If Trump’s reported timetable holds, the earliest realistic reopening of Hormuz now lies after the midterms, with a real risk of escalation before any deal. Until then, Europe should plan for oil above $100, sticky inflation and higher borrowing costs, not hope for a quick fix. Each proposal that fails makes the next one harder to believe.
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