Trump says Iran talks start Monday as oil slides 4.6%

Trump's claim that US-Iran negotiations begin Monday faces a credibility test after Tehran denied any talks are underway, even as oil prices tumbled more than 4 percent on hopes the Strait of Hormuz could reopen.

President Donald Trump said negotiations with Iran will begin Monday afternoon on a deal to reopen the Strait of Hormuz, sending Brent crude down 4.6 percent to $83.85 a barrel after he called off what he described as the "biggest attack since World War II."

"The credibility of actually sticking to a deal is questionable," said Trita Parsi, executive vice president at the Quincy Institute for Responsible Statecraft. "At some point, all credibility for negotiations is going to be lost."

Iran's Foreign Ministry spokesperson Esmaeil Baghaei said Monday that Tehran is not negotiating with Washington, only with Oman over a temporary safe route through the strait that carries roughly one-fifth of global oil supplies. Pakistani government sources told Anadolu that no date or venue has been finalized for direct talks, with Islamabad and Doha serving as expected venues. West Texas Intermediate fell 4.7 percent to $80.66.

The conflicting narratives leave markets pricing a wide range of outcomes. If talks proceed and the strait reopens, oil could extend losses; if they collapse, the risk premium returns. The US-Iran memorandum signed June 17 gave the sides 60 days to reach a nuclear deal, with fewer than 30 days remaining in that window.

Trump told reporters aboard Air Force One on Sunday that Saudi Arabia, the United Arab Emirates and Qatar urged him to hold off on strikes, contradicting a Wall Street Journal report that the UAE actually wanted escalation. He said he spoke with Saudi Crown Prince Mohammed bin Salman, who conveyed that an escalation in fighting could have a severe impact on the global economy if Tehran responded by targeting Gulf allies.

The president's latest walk-back marks the fourth time he has announced halts to strikes on Iran since the US and Israel attacked on Feb. 28, only for fighting to resume. Iran's defense minister said the country was "neither surprised nor passive" following Trump's announcement, while a struggle for control appears to be brewing within the theocracy's leadership between factions opposing all negotiations and those who count on military pressure to win at the table.

Hormuz talks in 'final stages' between Iran and Oman

Iranian Foreign Minister Abbas Araghchi said negotiations with Oman on the future management of the Strait of Hormuz were in their "final stages," according to IRNA. Baghaei said Tehran has been holding talks with Oman "for the past seven to eight days" and that "some progress has been achieved."

The strait was essentially closed by Iran in early March after the US and Israel began air strikes on Feb. 28. Iran allowed few ships through until it signed a memorandum of understanding with the US on June 17, but vague wording triggered a dispute over shipping routes. Iran attacked several vessels following an Oman-approved route, and the strait was closed again last week. A tanker off Oman reported an explosion near its vessel on Monday, according to a maritime monitor.

Gulf states weigh economic exposure

Saudi officials have underscored that the kingdom, UAE and Qatar are well-positioned to defend against further Iranian attacks, but that Kuwait could be more vulnerable to strikes by Iranian-backed militias in Iraq. The crown prince's call with Trump happened before the president's social media announcement of the deal's "perimeters."

According to Israel's Channel 12, Israel was to be part of the attack that was called off about 24 hours before it was set to begin, and only learned of the cancellation through Trump's social media post. US Central Command had prepared an attack plan on Iranian energy infrastructure, with planning beginning Wednesday, a day after Prime Minister Benjamin Netanyahu met with Trump at the White House.

The last time the strait faced a prolonged closure was during the Iran-Iraq War in the 1980s, when oil prices more than doubled. Current Brent levels at $83.85 remain well below the 2022 peak above $120 following Russia's invasion of Ukraine, suggesting markets have not fully priced a sustained disruption. Defense Secretary Pete Hegseth said the Pentagon remains "locked and loaded" for strikes at "levels not seen since World War II," keeping the military option on the table as negotiations attempt to gain traction.

This article is for informational purposes only and does not constitute investment advice.