Tehran's formal reply to a US proposal to end their month-long conflict now sits with Pakistani mediators, leaving oil markets braced for a move that could either de-escalate the crisis or reignite open hostilities.
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Iran Responds to US 14-Point Peace Plan as Gulf Tensions Simmer
Iran has formally responded to a 14-point US proposal aimed at ending a conflict that has roiled global energy markets, delivering its reply through Pakistani intermediaries on May 10, according to the state-run Islamic Republic News Agency. The move injects fresh uncertainty into a volatile situation, with the US awaiting terms that address its demands for nuclear concessions and the reopening of the Strait of Hormuz.
"The goal is to realise the rights of the Iranian people and defend national interests with authority," Iranian President Masoud Pezeshkian said, framing the negotiations as a defense of national interests rather than surrender.
The diplomatic development follows a week of heightened military friction. The US disabled two Iranian oil tankers for allegedly breaching its blockade, while drone attacks, attributed to Iranian allies, targeted a cargo ship off Qatar and were repelled by Kuwait and the United Arab Emirates. These clashes have tested a fragile ceasefire that began April 8.
The core of the standoff remains the Strait of Hormuz, a chokepoint for roughly one-fifth of global oil supply, and Iran's stockpile of approximately 440 kilograms of uranium enriched to 60 percent purity. A rejection of US terms by Iran could see President Trump make good on threats to resume military operations, while an agreement could unwind the conflict's risk premium, pressuring elevated oil prices.
Strait of Hormuz the Main Sticking Point
While President Trump has expressed optimism for a deal, telling reporters "it’s very possible that we’ll make a deal," Iranian officials have signaled that key US demands are non-starters. The US proposal, reported by Axios and Reuters, is understood to require Iran to halt uranium enrichment for at least 12 years and allow shipping to resume in the Strait of Hormuz within 30 days in exchange for lifting sanctions and unfreezing assets.
However, Iranian officials have publicly stated their nuclear program is not on the table in this phase of talks and have resisted transferring their enriched uranium stockpile out of the country. Control over the Strait of Hormuz has also been described as a "red line." An Iranian lawmaker, Ebrahim Rezaei, dismissed the reported US terms as "more of an American wish list than a reality."
A Fragile Ceasefire
The back-channel diplomacy is occurring against a backdrop of continued low-level conflict. The recent drone strikes in the Gulf put pressure on the month-old truce, though they caused no casualties. The United Arab Emirates said its air defense systems successfully engaged two UAVs launched from Iran, a direct accusation Tehran has previously denied.
Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani has been active in mediation, urging Iran's Foreign Minister that using the Strait of Hormuz as a "bargaining chip" would only deepen the crisis. While the contents of Iran's response remain unknown, its delivery marks a critical juncture. The last time a similar multi-point negotiation framework was attempted in 2015, it ultimately led to the JCPOA nuclear deal, which provided several years of sanctions relief and market stability before its collapse.
This article is for informational purposes only and does not constitute investment advice.
[1] Iran has responded to the US proposal to end the war[2] US-Iran ceasefire under strain as Gulf states report drone attacks[3] US and Iran exchange fire in Strait of Hormuz as peace proposal awaits response[4] What are US proposals to end war, and will Iran agree to them?[5] Trump says war will be ‘over quickly’ as Iran reviews US peace proposal
