Key Takeaways:
The US and Iran are locked in a fragile ceasefire that both sides are violating, even as negotiators haggle over the wording of a deal to end a three-month war that has reshaped global energy markets.
The US military struck Iranian missile sites and mine-laying boats near the Strait of Hormuz on Monday, hours after negotiators arrived in Qatar for talks, as a potential peace deal remained hung up on disputes over a single sentence.
"It's going to take a couple of days to settle down to the disagreements over a word, a sentence," Secretary of State Marco Rubio told reporters en route to India, signaling that a preliminary memorandum of understanding was close but not finalized.
Brent crude climbed 3.3% to $99.40 a barrel in early trading Tuesday, reversing some of Monday's 7% plunge that followed President Donald Trump's claim that an agreement had been "largely negotiated." The Strait of Hormuz, which carried about a fifth of the world's daily oil supply before the war, remains effectively blockaded by Iran, with 39 Japan-related vessels still stranded in the Gulf.
The stakes extend beyond oil prices. Iran retains roughly 70% of its prewar missile stockpile and has restored operational access to 30 of 33 missile sites along the strait, according to US intelligence assessments — a finding that undercuts the Trump administration's narrative of decisive military victory and raises the cost of any failure to secure a diplomatic off-ramp.
A Ceasefire Under Fire
The US strikes near Bandar Abbas — a major port and Iranian naval base — targeted missile launch sites and boats attempting to lay mines, according to US Central Command. Iran's Islamic Revolutionary Guards Corps said it shot down an MQ-9 Reaper drone and fired on an F-35 fighter jet, claims that could not be independently verified. The IRGC warned that any violation of the ceasefire justified a "decisive reciprocal response."
The skirmishes are the latest in a series of exchanges since a two-week ceasefire was announced in April and later extended indefinitely. US forces have conducted multiple rounds of what they describe as self-defense strikes, while Iran has continued to threaten retaliation. The pattern echoes the final months of the 2015 nuclear deal era, when tit-for-tat incidents in the Gulf steadily eroded the diplomatic framework before its collapse.
The Nuclear Question Remains
Trump said Monday that Iran's enriched uranium — roughly 970 pounds stockpiled at 60% purity, according to the International Atomic Energy Agency — could be destroyed in place, transported to the US, or moved to another acceptable location with IAEA oversight. The position marks a shift from his earlier demand that Iran hand over all material to the US.
Iran's foreign ministry spokesman, Esmail Baghaei, said the focus of current negotiations is on ending the war, not nuclear details. "We have not entered into the details of this agreement," he told reporters in Tehran. The US has adopted the refrain "no dust, no dollars," insisting Iran will not see financial relief — including access to an estimated $25 billion in frozen assets — until its enriched uranium is disposed of.
For investors, the path forward hinges on whether the ceasefire can hold long enough for negotiators to bridge the gap between a preliminary memorandum and a binding agreement. If talks collapse, the US retains the option to resume intensive bombing along the strait — but at the cost of further depleting munitions stockpiles that senior military officials have already flagged as critically low. If a deal is reached, the immediate reopening of the strait would relieve the most severe energy supply disruption in decades, though Iran's nuclear and missile capabilities would remain unresolved, ensuring a persistent risk premium on Gulf crude.
This article is for informational purposes only and does not constitute investment advice.
