Iran has flatly denied US President Donald Trump's assertion that a draft agreement with Tehran encompassed the 'immediate, complete, and total' reopening of the critical Strait of Hormuz maritime corridor. According to the semi-official Fars news agency, citing sources connected to Iran's diplomatic team and military leadership, 'There is no agreement on reopening the Strait of Hormuz,' as reported by Business Standard. The source added that the maritime passage would stay blocked as long as US 'hostile actions' persist. Iranian state media similarly dismissed reports regarding an accord as baseless, with officials cautioning that the strait will stay shut for as long as Washington persists with what Tehran termed hostile actions. Maritime vessels will be allowed passage only following prior coordination with and formal authorisation from the Islamic Revolutionary Guard Corps Navy, with military sources warning that ships endeavouring to navigate unapproved routes could encounter 'incidents'.
Crude oil prices experienced dramatic volatility on Monday morning, with Brent crude futures dropping more than 6% to $82.41 and West Texas Intermediate futures for September delivery declining 4.5% to $80.89 per barrel as hopes of diplomatic breakthrough between the United States and Iran erased part of last month's rally. According to The Times of India, the announcement followed Trump's decision to call off an imminent attack on Iran in a bid to reach an agreement to reopen the Strait of Hormuz and resolve the deadlock over Tehran's nuclear capabilities. This latest reversal follows Trump's earlier claim of canceling a planned strike on Iran, with the President stating that Saudi Arabia, the United Arab Emirates, Qatar, and Iran itself all asked him to hold off. Trump told reporters aboard Air Force One that negotiations start the following afternoon, with the President maintaining on social media that US forces stand ready to resume action at any moment.
Behind-the-scenes diplomatic pressure over the weekend played a pivotal role in averting immediate conflict. Qatari officials engaged in intensive talks with Iran, the US and Oman, ultimately informing Trump on Saturday that Tehran had accepted a proposal regarding the strait. Concurrently, Saudi Crown Prince Mohammed bin Salman held a telephone call with Trump to urge against military action. Following these exchanges, Trump announced on Truth Social that he was halting the planned strikes, citing progress on the shipping route and nuclear discussions. However, Iranian military leaders rejected Trump's characterisation as a 'lie,' while a source tied to Tehran's delegation told the semi-official Fars News Agency that no formal accord on the strait had yet been reached. Trump also signalled a possible easing of tensions over the weekend, writing on his Truth Social platform late on Saturday that Iran and other Middle Eastern countries had asked for time to finalise a deal that would ensure 'the Immediate, Complete and Total' reopening of the Strait of Hormuz and 'an end to Iran's nuclear threat.'
The Strait of Hormuz represents a critical chokepoint for global oil flows, with about 20 million barrels of oil passing through it every day in 2024, according to EIA data, representing roughly a fifth of the oil the world uses. The strategic importance is underscored by the fact that only about 2.6 million barrels a day can go around it, through pipelines in Saudi Arabia and the UAE, leaving the rest with nowhere else to go. The sharp decline followed a rally of more than 20% in both benchmark contracts last month, fuelled by renewed conflict between the US and Iran and attacks on several tankers near Oman. Only about 5 cargo ships passed through the Strait of Hormuz on Tuesday, as oil tanker traffic through the strategic waterway remained low. The latest developments have analysts tracking Hormuz reopening timelines now expect the route to stay restricted into 2027, with the United States and Saudi Arabia launching strikes targeting Iranian-backed groups inside Iraq after blaming those groups for drone attacks on Saudi oil facilities. Iran responded to these accusations by warning that holding it responsible for those attacks was a major miscalculation.
Iranian defence officials have rejected Trump's claims that Tehran had requested him to stand down from a proposed American strike, with Mehr News Agency citing officials characterising the assertion as 'another lie' aimed at exerting leverage over Gulf nations through intimidation. The officials stated that Iran's defence personnel remain at the 'highest level of readiness' and stand equipped for all contingencies, with 'If confrontation becomes inevitable, the battlefield will be decisive,' adding that the resolution would establish 'who holds the power and who will have the final say'. Iranian Foreign Minister Abbas Araghchi reaffirmed Tehran's preparedness to counter any US or Israeli offensive during a telephonic interaction with Saudi Foreign Minister Prince Faisal bin Farhan on Saturday. Araghchi stated that Iran stands equipped to protect its sovereignty, territorial integrity and national security, asserting that any hostility would meet a 'decisive and proportionate response' from Iranian personnel. Additionally, Brigadier General Seyyed Majid Ebn-e-Reza, Acting Minister of Defence and Armed Forces Logistics, alleged that Tehran's opponents were resorting to psychological warfare and noted that Tehran intends to leverage the impending threat to heighten defensive preparedness, reinforce deterrence and broaden its military capabilities.
