Trump denies Iran talks stalled as dialogue enters 3rd day

President Donald Trump said the US and Iran are continuing dialogue Monday, denying reports that talks had broken down, as the two sides remain at odds over nuclear enrichment, frozen assets and shipping through the Strait of Hormuz.

"The claim that the US and Iran have stopped dialogue is wrong," Trump said in a social media post, without providing details on the status of the draft memorandum of understanding.

The president's denial came after Iran's Tasnim news agency reported Tehran had suspended talks with mediators to protest Israel's expanding ground offensive in Lebanon. Iran's chief negotiator Mohammad Bagher Ghalibaf said the US naval blockade and escalation in Lebanon were "clear evidence of US non-compliance with the ceasefire."

The Strait of Hormuz handles about 21% of global oil trade, and any breakdown in talks risks prolonging Iran's blockade of the waterway, keeping crude prices elevated. Brent crude has traded with a geopolitical risk premium of $5 to $8 a barrel since the Islamic Revolutionary Guards Corps began forcing vessels through its illegal traffic separation scheme in April, according to analysts.

Nuclear Enrichment and Frozen Assets Remain Key Sticking Points

Trump has requested several amendments to the draft MoU, including changes to how and when the US would secure Iran's highly enriched uranium, according to a senior administration official who spoke to Axios on May 30. The current draft states that Iran would commit to not pursue a nuclear weapon but does not require Tehran to hand over its HEU or halt enrichment — issues that would be discussed during a 60-day period after signing.

Iranian officials have repeatedly insisted they will not suspend enrichment or transfer HEU from the country. An Iranian negotiating team member close to Parliament Speaker Mohammad Bagher Ghalibaf said on May 30 that Iran's "irreversible" access to $12 billion in frozen assets is one of its "main" conditions for any possible agreement. Trump appeared to reject unfreezing those funds on May 29, stating that "no money will be exchanged until further notice."

Three US officials told the New York Times on May 30 that Trump is concerned about parts of the draft MoU that would involve unfreezing Iranian funds. Iranian Foreign Affairs Ministry Spokesperson Esmail Baghaei stated on May 25 that any released assets would go toward Iran's defense and military sectors, including missile and drone programs.

Hardliners in Tehran Complicate the Path to a Deal

The hardline faction within the Iranian regime is not a monolith but contains a spectrum of actors with varying priorities, according to the Institute for the Study of War. IRGC Commander Major General Ahmad Vahidi and his inner circle remain unwilling to make meaningful concessions, while other hardliners affiliated with the Paydari Front have criticized the negotiating team for being "too conciliatory."

Analysts close to the regime told the New York Times on May 29 that hardliners are attempting to derail negotiations. IRGC-affiliated media has argued that it would be better to reach no agreement than for Iran to accept a "bad deal" that fails to secure Iranian interests.

The last time US-Iran negotiations reached a similar impasse — during the 2015 JCPOA talks — the two sides took an additional four months to finalize the framework after initial political-level agreements, with Brent crude swinging 12% during that period.

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