Trump rules out Iran talks as Brent holds above $87

President Trump said Monday the US will not hold talks with Iran, extending a 24-week war that has cut Hormuz transits from 130 ships daily to as few as three, with Brent near $88.

"If both sides are prepared to compromise, there is still a path towards ending the conflict and reopening the strait," said Negar Mortazavi, senior fellow at the Center for International Policy. "If they are not, Hormuz could remain restricted, and the confrontation risks becoming another prolonged, open-ended conflict in the Middle East."

The statement came as the 60-day memorandum of understanding signed in June expired without a deal. Iran's foreign ministry said Tehran reached an agreement with Oman on future shipping routes, while Trump threatened to bomb Oman if it "gets in the way." US Central Command said it has redirected 64 commercial vessels, disabled three and boarded two under the naval blockade. Maritime tracking firm Kpler reported only five commodity vessels transited the strait on Saturday and none on Sunday, versus 31 the prior weekend.

The standoff carries direct costs for global markets. Brent crude rose 2.7 percent to $90.87 on Monday before easing to about $87.61 Tuesday, while the average US gasoline price ticked up to $4.01 a gallon. The Pentagon signed a $22.9 billion contract with Raytheon for Tomahawk missiles, and the Center for Strategic and International Studies estimates US Patriot and THAAD interceptor stocks have been roughly halved since the war began in late February.

Iran has said the strait will remain closed until Washington lifts sanctions, releases frozen assets and provides compensation for attacks. Mohsen Rezaei, secretary of Iran's Supreme National Security Council, told China's ambassador to Tehran that "as long as America does not change its behaviour and does not accept Iran's conditions, the Strait of Hormuz will not be opened."

The waterway, through which one-fifth of global oil and natural gas is shipped during peacetime, has become the central flashpoint of the conflict. Iran closed it shortly after US-Israeli bombing began at the end of February, and Tehran says it is only talking to Oman — whose territorial waters the strait also passes through — about future management.

Blockade Redirects 64 Vessels as Missile Stocks Halve

The US military's blockade has redirected 64 commercial vessels, disabled three and boarded two, according to Central Command. But the campaign is consuming resources at an unsustainable pace. The Pentagon's $22.9 billion Tomahawk contract with Raytheon came after CSIS estimated US stocks of Patriot and THAAD interceptors have been cut roughly in half or more since February. Trump and Defense Secretary Pete Hegseth have denied reports of shortages.

Iran, meanwhile, is escalating its own posture. The Islamic Revolutionary Guard Corps said it is developing the capability to conduct operations on "enemy soil," and Iran's army chief announced a $30,000 bounty for the capture or killing of US service members. The IRGC also rejected Trump's claim of backchannel talks as a "delusion."

Red Sea Front Widens With Six Killed

The conflict has spilled into the Bab al-Mandeb Strait at the entrance to the Red Sea, where Iranian-backed Houthi forces killed six people in an attack on a Saudi cargo vessel Tuesday — the first deaths from Houthi attacks on shipping since the war began. The strait handles about 11 percent of global oil and 8 percent of liquefied natural gas trade. Saudi Arabia has announced a new maritime alliance to secure the waterway.

The last time Hormuz traffic collapsed to these levels was during the 2019 tanker attacks, when the strait saw brief disruptions but never a sustained closure. The current shutdown has now lasted nearly six months, with no diplomatic off-ramp in sight. Trump said Monday he has "no time schedule" to end the war, while Iran's foreign ministry dismissed the expired 60-day negotiating period as irrelevant because the US "began violating the memorandum shortly after its June 18 signing."

For markets, the key question is whether Trump's latest statement is a negotiating position or a genuine red line. If talks resume through Oman or another intermediary, oil prices could retreat quickly — Brent swung between $72 and $102 last month alone on deal hopes and disappointments. If the stalemate persists, the risk premium stays embedded in crude, gasoline and shipping costs, with the next escalation point likely to come as the US midterm campaign intensifies ahead of November.

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