President Trump on Sunday rejected Iran's response to a U.S. proposal to end the 73-day war, calling Tehran's terms "TOTALLY UNACCEPTABLE!" in a Truth Social post and leaving the standoff over the Strait of Hormuz frozen days before he is scheduled to meet Chinese President Xi Jinping in Beijing.

The collapse of the Pakistan-brokered exchange — Iran delivered its counteroffer through Islamabad on Sunday, four days after Tehran said it was formally reviewing Trump's 14-point framework — sent oil prices higher and revived the threat of renewed combat in a waterway that handles a large share of global crude and natural-gas shipments. Brent crude futures for July rose more than 2 percent to $103.93 a barrel by 7:39 a.m. ET, according to CNBC, and U.S. West Texas Intermediate for June climbed past $97. Both benchmarks are up about 40 percent since the U.S.- and Israeli-led war against Iran began Feb. 28.

What Iran asked for

Iran's counterproposal, transmitted to Pakistani mediators and described by Iranian state media, demanded an end to the war on all fronts, the lifting of U.S. sanctions on Iranian oil sales, a halt to Washington's month-old naval blockade of Iranian ports, and the release of Iranian assets frozen in foreign banks. Tehran also sought "safe passage through the Strait of Hormuz" and a regional security framework extending to Lebanon, where fighting between Israeli forces and Hezbollah has continued despite a month-old ceasefire.

Foreign Ministry spokesman Esmail Baghaei told reporters in Tehran on Monday that Iran "did not demand concessions" but only its "legitimate rights," and characterized the offer as "reasonable and generous." He accused Washington of "one-sided views" and excessive demands. Iranian President Masoud Pezeshkian wrote on social media Sunday that the country would "never bow down to the enemy," and Baghaei said Iran would "fight whenever it is necessary" while remaining open to diplomacy.

Trump's rejection included no counter-text. In an earlier post Sunday, the president accused Tehran of "playing games" with the United States for nearly 50 years, adding: "They will be laughing no longer!" U.S. Ambassador to the United Nations Mike Waltz told ABC the administration is giving diplomacy "every chance we possibly can before going back to hostilities."

On the Street

The rejection put a floor back under crude above $100. Citi analysts wrote in a client note that risks to oil prices remain tilted to the upside as long as Iran retains control over the timing of any reopening of the strait. "We assume that the regime will make a deal that reopens the Strait around end-May … but we continue to see the risks skewed towards this timeline being pushed out and/or a partial reopening, which means disruptions for longer," the bank wrote.

Felipe Elink Schuurman, chief executive of Sparta Commodities, told CNBC the supply shock now hitting markets is roughly the scale of the demand shock the world absorbed during the pandemic. "In 2020, on average, we lost 9 million barrels per day of demand versus 2019, which is pretty much the equivalent of what we are losing now in terms of supply," he said.

The Beijing angle

Trump is scheduled to meet Xi this week in Beijing, and U.S. officials have said they intend to press China — Iran's largest oil customer before the war — to lean on Tehran for a deal. The trip will give the president a stage on which to either announce diplomatic progress or signal a return to military pressure. He has repeatedly threatened to resume full-scale bombing if Iran does not accept terms to reopen the strait and roll back its nuclear program.

Israeli Prime Minister Benjamin Netanyahu, in a "60 Minutes" interview aired Sunday on CBS, said the war "is not over" and that Iran's stockpile of highly enriched uranium — more than 440 kilograms enriched to 60 percent purity, according to the U.N. nuclear watchdog — must be removed from the country. Asked how, he said: "You go in, and you take it out." Russian President Vladimir Putin said Saturday that Moscow's offer to take custody of the material remains on the table.

The counterpoint

Andrea Dessi of the American University of Rome, speaking to Al Jazeera, argued the impasse is a product of mutual maximalism rather than Iranian intransigence alone. He said the two sides "continuously stick to rather maximalist positions," with "the real casualty" being "the international economy and the populations of the Gulf and the broader Middle East." Two Western officials familiar with intelligence assessments told NBC News the Iranian regime could likely withstand a U.S. naval blockade for months — a calculation that weakens Washington's leverage the longer the standoff runs.

Defense ministers from the United Kingdom, France and more than 50 other countries are scheduled to meet virtually Tuesday to discuss restoring commercial traffic through the strait once hostilities end. Trump leaves for Beijing later this week.