President Trump announced that new negotiations with Iran would commence on Monday, framing them as Iran's "last chance" to reach a deal before facing further action. This announcement came after Trump had canceled planned military strikes against Iran, indicating that he was willing to pursue diplomacy.
However, Iran's Foreign Ministry contradicted Trump's statement, asserting that it was not engaged in direct negotiations with the United States. Iranian officials, including spokesperson Esmaeil Baghaei, maintained that their ongoing talks were exclusively with Oman and focused solely on establishing a temporary safe passage through the Strait of Hormuz. These discussions with Oman aim to create a post-conflict shipping framework for the critical waterway, through which approximately one-fifth of the world's oil and liquefied natural gas supplies typically flow. Commercial shipping through the Strait had reportedly decreased by about 28% in recent days.
Trump, in response to Iran's denial, criticized their leadership as "unbelievably duplicitous" and accused them of lying about the peace talks. Despite the diplomatic confusion, Trump insisted that the Strait of Hormuz would be fully open to marine traffic by Tuesday, as part of what he termed "phase one" of the negotiations, with a second phase to address Iran's nuclear program. Analysts, including those from BMI (a Fitch Solutions unit), noted that while a deal on the Strait of Hormuz is achievable, a broader agreement on the nuclear issue remains far more elusive.
Oil prices reacted to the shifting diplomatic landscape, with Brent crude futures sliding by $4.08, or 4.64%, to $83.85 per barrel, and West Texas Intermediate crude falling by $4.01, or 4.74%, to $80.66 a barrel. This drop occurred after Trump called off the planned attacks. Trump also mentioned that he called off major attacks on Friday at the request of Qatar, Saudi Arabia, and the United Arab Emirates, who urged him to pursue a deal instead.
