Iran Rejects US Terms, Clouding Peace Deal for 1,600 Ships

A fragile pause in military action gives way to renewed uncertainty as an Iranian official calls a US peace proposal a “list of American wishes,” pushing back against claims of a breakthrough.

Conflicting messages from Washington and Tehran are whipsawing energy markets, with oil prices falling over 2 percent after the US paused naval operations in the Strait of Hormuz only to pare losses when Iran signaled its rejection of key US terms for a peace deal.

A spokesman for Iran’s parliamentary national security committee, Ebrahim Rezaei, said the US proposal was “more a list of American wishes than a reality,” warning that Iran was ready to respond if the United States did not grant “necessary concessions.”

The initial optimism saw Brent crude, the global benchmark, fall as low as $102 a barrel before recovering to trade around $108. The partial recovery in oil came as equity markets rallied on hopes of de-escalation, with Europe’s Stoxx 600 gaining over 2 percent and South Korea’s KOSPI index rising more than 6 percent.

The diplomatic back-and-forth leaves the fate of 1,600 ships and 20,000 seafarers stranded in the vital waterway hanging in the balance. While former President Trump has threatened that “the bombing starts” if a deal isn’t reached, Iran’s dismissal of the current terms suggests the two-month blockade of the Strait of Hormuz is far from over.

Diplomatic Chessboard Expands

The standoff is pulling in other global powers, with China and Pakistan playing key roles. Chinese Foreign Minister Wang Yi met with his Iranian counterpart, Abbas Araghchi, in Beijing, urging an end to the war and the reopening of the strait, a vital artery for China’s own energy imports. According to Xinhua, Wang stressed that “restoring normal, safe passage” was a common concern for the international community.

Meanwhile, Pakistan’s Prime Minister Shehbaz Sharif, whose country has been mediating talks, publicly thanked Trump for pausing the naval escort mission, framing it as a “gracious response” that could build momentum toward a lasting agreement.

A War of Words

Despite the diplomatic maneuvering, rhetoric from both the US and Iran remains sharp. Trump coupled his claims of “great progress” with a fresh ultimatum on Truth Social, stating that if Iran doesn’t agree to unspecified terms, attacks would resume at a “much higher level and intensity.”

This followed contradictory messaging from his own administration, with Secretary of State Marco Rubio having declared the war “over” just a day earlier. Tehran has responded by announcing its own new mechanism to oversee maritime traffic, demanding ships obtain a permit from a “Persian Gulf Strait Authority” in a clear assertion of sovereignty over the contested waters. The move comes as US average gasoline prices hit $4.54 a gallon, up 53 percent since the conflict began, bringing the economic cost of the crisis home to American consumers.

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