Key Takeaways:
Tehran denied any upcoming negotiations with Washington, hours after President Donald Trump said a meeting would take place Tuesday in Doha.
Iran said it has no plans for negotiations with the US in the coming days, hours after President Donald Trump announced a Tuesday meeting in Doha, deepening confusion over the diplomatic path to reopen the Strait of Hormuz.
"Reports by some media about technical talks by the working groups being held in Doha are not confirmed," Kazem Gharibabadi, a senior Iranian negotiator, told state-run IRNA.
An Iranian expert delegation will travel to Doha to follow up on the Islamabad Memorandum of Understanding signed June 17, but Foreign Ministry Spokesman Esmaeil Bagaei said the visit is unrelated to the US delegation's trip to Qatar. The MOU initiated a 60-day negotiation period toward a final deal to reopen the Strait of Hormuz, which carried a fifth of the world's oil before the war began Feb. 28. Only 89 vessels transited the waterway over the past 72 hours, well below the historical average of 138 per day.
The breakdown in diplomatic coordination threatens to unravel the fragile interim deal and risks a fresh spike in crude prices, which had been expected to return to pre-war levels as shipping resumed. Iran views the Strait of Hormuz as its primary leverage against future US military action, Tehran-based analyst Abas Aslani told Al Jazeera, and any attempt to change the situation "by force" is "unacceptable for Tehran."
The conflicting statements followed four days of tit-for-tat strikes that began Thursday when an Iranian projectile hit a Singapore-flagged cargo vessel. The US retaliated with strikes on Iranian drone storage sites, coastal radar installations and missile infrastructure in southern Iran, including on Qeshm Island. Iran then launched ballistic missiles and drones at the US Ali Al Salem Air Base in Kuwait and the US Fifth Fleet headquarters in Bahrain.
White House Press Secretary Karoline Leavitt said special envoys Jared Kushner and Steve Witkoff would travel to Qatar for "high-level meetings" this week. A US official told Reuters that both sides would "stand down for now and vessels can move freely." Yet Iran's Revolutionary Guards said "all diplomatic processes" would be halted as a result of the US strikes, which it called a cease-fire violation.
Strait of Hormuz remains the flashpoint
The waterway has been the central point of contention. Iran's recently created Persian Gulf Seaways Management Organization said vessels not traveling on designated routes would not be guaranteed safe passage, rejecting the coordinates of two new temporary shipping lanes established under a UN-sponsored evacuation plan coordinated with Oman. Iranian Foreign Minister Abbas Araghchi reiterated Sunday that Tehran must govern the strait, saying any attempt to establish "new or separate arrangements" would "lead to further complications."
Oman's Foreign Minister Badr Albusaidi said Monday that Oman and Iran are considering charging service-related fees for commercial ships transiting the strait, though he said Oman does not support imposing transit fees, calling them "internationally forbidden."
The last time US-Iran military exchanges escalated to this level was in January 2020, after the US killed Qasem Soleimani, when Brent crude spiked above $70 a barrel and gold surged past $1,600 an ounce. This time, the stakes are amplified by the ongoing war that has already disrupted global energy flows for nearly four months.
$6 billion in frozen assets and the deal's fragility
Iranian President Masoud Pezeshkian said Monday that $6 billion of the $12 billion in Iranian assets held in Qatar would be released and returned to the country, part of the terms of the interim deal. The reformist president called the MOU "a great victory for the Iranian people," in comments aimed at selling the public on the agreement.
But the diplomatic confusion raises questions about whether the 60-day negotiation window can hold. Pakistan, a key mediator, said talks would resume Tuesday. Iran's parliament speaker Mohammad Bagher Qalibaf called for a new "conflict control unit" among Iran, the US and Lebanon to meet as soon as possible, as Israel continued attacks on southern Lebanon despite signing a framework agreement June 26.
For markets, the risk is clear: any sustained disruption to Strait of Hormuz traffic would delay the return of pre-war oil prices and push safe-haven assets higher. Gold and the US dollar are likely to strengthen on the breakdown in diplomatic channels, while broader equity markets face headwinds from elevated energy costs.
This article is for informational purposes only and does not constitute investment advice.
