Long-term energy crisis looms as US and Iran remain in standoff.

Traffic of motorcycles and cars on a street in Tehran, Iran, May 9, 2026. Talks between the United States and Iran stumbled again over the weekend. (Arash Khamooshi/The New York Times)

By AARON BOXERMAN and MAX BEARAK

As President Donald Trump said Monday that the ceasefire in Iran was on “life support,” countries around the world were bracing for prolonged economic woes stemming from high energy prices.

The average price of gasoline in the United States has climbed to more than $4.55 per gallon, up more than $1.50 since the war began in late February. India’s prime minister told his citizens Sunday to conserve fuel, and the status of the Strait of Hormuz, a critical fuel shipping lane, looms over talks between Trump and China’s president, Xi Jinping, later this week.

Talks between the United States and Iran stumbled again over the weekend. Replying to a U.S. proposal to reopen the strait and negotiate an end to the war, Iran called for U.S. war reparations, recognition of its sovereignty over the Strait of Hormuz and an end to U.S. sanctions, Iran’s state-owned broadcaster reported Monday.

The Iranian offer is a “piece of garbage,” Trump told reporters in the Oval Office, adding that Iran was in the grip of “lunatics.” On Sunday, before any elements of the counterproposal were made public, Trump dismissed it as “TOTALLY UNACCEPTABLE,” but did not specify his objections.

Iran’s demands for reparations and sovereignty over the strait would almost certainly be nonstarters for the United States, while ending sanctions would be possible only if Iran were willing to make major concessions on its nuclear program.

A week of strikes in the Persian Gulf had already rattled their month-old ceasefire. The truce was intended to provide an opening to negotiate a more comprehensive peace deal and end Iran’s de facto blockade of the strait.

Small-scale attacks have continued around the strait. On Sunday, the United Arab Emirates said it had again been attacked by Iranian drones, and last week U.S. warships fired on military facilities along Iran’s coast.

Here’s what else we’re covering:

— Gas tax relief: Trump mused out loud Monday about suspending the federal gasoline tax of 18.4 cents per gallon, an action that would require congressional approval.

— Oil prices: Oil prices rose and stocks opened relatively flat for trading in the United States on Monday as investors reacted to Trump’s swift rejection of Iran’s response. Oil companies have posted huge profits despite the shipping disruptions; Aramco, Saudi Arabia’s national oil company, said Monday that its first-quarter profits had jumped 25%.

— Enriched uranium: In an interview with the syndicated news show “Full Measure” aired Sunday, Trump said the U.S. was surveilling Iran’s remaining enriched uranium stockpile and would “get that at some point.” The president’s comments on the stockpiles have been inconsistent; last month, he said he didn’t care about the uranium because it was buried “so far underground.”

— China summit: Trump hoped to have the conflict resolved by the time he headed to China this week to meet with Xi, who is eager to see an end to the fighting in Iran.