President Donald Trump on Monday said the ceasefire in the Middle East war was on “life support,” rejecting Iran’s latest counteroffer, which it said had included demands for the release of frozen assets and the end of a US blockade.

The president’s reaction to Iran’s position — itself a response to a US proposal — sent oil prices soaring and dashed hopes that a deal could be quickly negotiated to reopen the Strait of Hormuz to commercial shipping.

After slamming the response as “TOTALLY UNACCEPTABLE”, Trump insisted the US would see a “complete victory” over Iran, adding that the truce, which has largely halted fighting in the Gulf for over a month, was on its last legs.

“The ceasefire is on massive life support, where the doctor walks in and says, ‘Sir, your loved one has approximately a one per cent chance of living,’” he told reporters on Monday.

The developments unnerved global energy markets already thrown into chaos by the war and the overlapping blockades imposed by Iran and the US in the Strait of Hormuz — a vital conduit for oil and gas shipments.

“The energy supply shock that began in the first quarter is the largest the world has ever experienced,” the CEO and president of Saudi oil giant Aramco, Amin Nasser, told investors.

“If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalisation will last into 2027,” he said.

Hunger and starvation

Aside from energy, the world also faces a shortage of fertiliser, much of which comes from Gulf ports, and hence food for tens of millions of people.

Jorge Moreira da Silva, executive director of the United Nations Office for Project Services (UNOPS), told AFP there were just a few weeks left to avert a potentially “massive humanitarian crisis”.

“We may witness a crisis that will force 45 million more people into hunger and starvation.” Trump did not say what had offended him in Iran’s response, but Tehran’s foreign ministry said it had called for an end to the US naval blockade of its ports and to the war “across the region” — implying a halt to Israel’s strikes targeting Hezbollah in Lebanon.

Crucially, ministry spokesman Esmaeil Baqaei told reporters, Iran demanded the “release of assets belonging to the Iranian people, which have for years been unjustly trapped in foreign banks”.

This would not be just a return to the status quo before the United States and Israel launched the war on February 28, but a victory in the Islamic republic’s long-standing campaign against its economic isolation.

“We did not demand any concessions. The only thing we demanded was Iran’s legitimate rights,” Baqaei said.

An end to international sanctions would diminish Washington’s leverage over Tehran as it tries to secure a lasting end to Iran’s nuclear enrichment. The US, Israel and their allies have long accused Iran of seeking atomic weapons, an accusation Tehran has repeatedly denied.

‘It’s not over’

Israeli Prime Minister Benjamin Netanyahu insisted the conflict would not end until Iran’s nuclear facilities were destroyed.

“It’s not over, because there’s still nuclear material — enriched uranium — that has to be taken out of Iran,” he told US broadcaster CBS’s 60 Minutes.

“There’s still enrichment sites that have to be dismantled.”

The Wall Street Journal, citing people familiar with the matter, said Iran’s counter-proposal had included the possibility of diluting some of its highly enriched uranium, with the rest transferred to a third country.

Iran had sought guarantees that the transferred uranium would be returned if negotiations failed or Washington abandoned the agreement, sources told the Journal.

‘Restraint over’

US officials have stressed it would be “unacceptable” for Tehran to control the international waterway.

Trump told Fox News that he was considering reviving a short-lived US operation to escort oil and other commercial shipping through the Hormuz, but that he had not yet taken a final decision.

Saudi sources previously told AFP that Saudi Arabia had prohibited the US from using its airspace and bases for the operation the first time around over fears “it would just escalate the situation and would not work”.

The US Navy is also blockading Iran’s ports, at times firing on ships to disable them or boarding and diverting them.

In a social media post on Sunday, the spokesman for the Iranian parliament’s national security commission warned Washington: “Our restraint is over as of today.”

“Any attack on our vessels will trigger a strong and decisive Iranian response against American ships and bases,” Ebrahim Rezaei said.