Oil rebounds after Trump rejects Hormuz terms; US–China truce only buys two months

Friday crude sold about 3% on a hoped-for US–Iran opening of Hormuz. Over the weekend President Trump rejected Iran’s seven-day terms. Brent pushed back through $107 and WTI toward $94. The Trump–Xi summit only extended the Busan trade truce two months, to 10 January 2027. Energy still sets the FX rates tape.

7 min read · 28 September 2026

USD/CAD

AUD/USD

USD/CNH

Hormuz is back on the blotter

Friday 25 September Brent slipped from the mid-$106s toward $104 and WTI toward $92 as desks priced a path to reopen the Strait. Monday the tape reversed. Trump rejected Iran’s conditional ceasefire. Tehran, per weekend wires, would not soften the seven-day reopening proposal. MUFG had oil back toward recent highs near $110 on the disappointment. That is why USD can firm even when risk currencies want a truce headline: higher crude keeps US inflation odds — and October hike odds — alive.

A two-month trade truce, not a deal

Treasury Secretary Bessent said the Busan arrangement moves from a 10 November lapse to 10 January 2027. China’s commerce ministry confirmed the extension on Monday and listed working groups on agriculture, coal purchases for 2027–28, financial-services licences, and an AI-incident channel. There was no comprehensive tariff reset. Markets had marked a longer extension. AUD, NZD and USD/CNH therefore treat this as less-bad, not risk-on. Offshore yuan near 6.71 is a relief bounce, not a new regime.

What the desk watches next

Whether bombing talk after the US midterms stays a wire or becomes a strip. Refined-product cracks and TTF gas will show if the oil spike is passing through. On the China side, watch the $30bn reciprocal-cut talk and whether Beijing actually books the farm and coal tonnage. USD/CAD still trades the yield gap more than the crude print. Do not mix a Hormuz headline with a CAD long, or a two-month truce with an AUD long.

Risk note

Geopolitics and trade talks gap. Spreads widen into both. This note is not a recommendation to trade oil, CAD, AUD or CNH. SummitFx does not take client orders in physical crude.

These notes are education, not a recommendation to trade, and not a solicitation. Leveraged FX can return a total loss of capital, quickly. Nothing here is personal advice. SummitFx does not hold client funds. Read the risk disclosure.