North America Brief: Oil Jumps to $105.50 After Trump's Rejection — Iran Says 'Never Bow'
Day 73. Brent jumps 4% to $105.50 on Trump's rejection of Iran's peace plan. Iran vows to "never bow." Citi warns risks remain skewed upward. Gas prices at $4.48 nationally, California above $6. War enters 11th week. Hormuz remains effectively closed. No new talks scheduled.
Day 73. The market verdict on Sunday's diplomatic collapse came on Monday. Brent crude jumped as much as 4% to $105.50 a barrel before settling slightly lower. Iran said it will "never bow." Citi warned risks remain skewed upward for oil prices. And at the pump, Americans continue to pay 50% more than they did three months ago. The war is now in its 11th week with no clear path to resolution.
Commodity snapshot (as of May 11 — Day 73)
- Brent crude: jumped as much as 4% to $105.50, settled lower
- WTI crude: climbed on rejection news
- US gas average: $4.48/gallon (+50% since pre-war)
- California gas: above $6/gallon
- Hormuz: remains effectively closed
Markets reprice the collapse
The Brent crude jump to $105.50 was the clearest market verdict yet on the breakdown of US-Iran talks. The price eased back to settle in the lower $100s. Citi's analysis: risks remain "skewed upward" — meaning the next moves are more likely up than down. Bloomberg has flagged Wall Street scenarios where Brent could push toward $120-126 if Hormuz stays closed and the ceasefire collapses entirely. The April 30 brief touch of $126 set the recent high; Sunday's rejection puts that level back in play.
Iran: "never bow"
After Trump's "TOTALLY UNACCEPTABLE" rejection of Iran's peace response, Tehran responded with rhetoric that closed off easy de-escalation. Iran's foreign ministry vowed the country "will never bow." The framing is significant for domestic politics in both countries — neither leader can be seen capitulating. Iran's structural position remains: end the war and reopen Hormuz first, nuclear later. The US position is the inverse. The "one-page memo" had bridged this with simultaneous concessions; that bridge is now broken.
Gas prices: the political pressure builds
The price of a gallon of regular gas in the US remains at a $4.48 average per AAA — 31 cents higher than just a week ago and 50% higher than before the war began. California has topped $6/gallon, a 4-year high. The political pressure on Trump grows with each week the strait stays closed. Secretary of State Marco Rubio acknowledged the pain but said the US is "more insulated than other countries." That framing won't survive a sustained $4.48+ pump price into summer.
Israel adds pressure
Israeli PM Netanyahu's Sunday warning that the war is "not over" continues to ripple. The Israel-Lebanon ceasefire from April 16 — day 25 today — has technically held. But Netanyahu's language gives Israel room to resume strikes if it judges Hezbollah is rearming. If Israel does escalate, the linked US-Iran ceasefire becomes harder to keep stable. Citi specifically cited "Israel warned that the conflict with Iran is not over" as a key upward risk factor.
Project Freedom paused
Trump's "Project Freedom" — the US operation to guide commercial vessels through Hormuz — remains paused after he announced the suspension last Tuesday "to finalize a deal with Iran." With the deal rejected, the question of whether to resume escort operations now sits on Trump's desk. Resuming Project Freedom would help shipping but risk renewed Hormuz skirmishes. Leaving it paused keeps Hormuz functionally closed.
What to watch
Whether Iran sends an updated proposal — Tehran's "never bow" rhetoric suggests not soon. Trump's next move — escalation, deadline, or quiet talks. Oil's trajectory — if Hormuz stays closed and Israel escalates, $120+ is the realistic upper bound. The Royal Navy destroyer's positioning. And the political pressure at home — gas at $4.48 average is the highest in nearly four years.
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