US-Iran peace deadline lapses as Hormuz tensions deepen

A 60-day window for the United States and Iran to negotiate a durable peace agreement has expired without a breakthrough, leaving the Strait of Hormuz dispute unresolved and military and economic pressure intensifying across the Gulf.
The deadline was part of an interim framework agreed in June after months of conflict. It was designed to halt fighting, restore commercial navigation through the Strait of Hormuz and provide time for negotiations covering Iran’s nuclear programme, sanctions relief and other outstanding disputes. Instead, the arrangement unravelled within weeks as Washington and Tehran accused each other of failing to honour its terms.

President Donald Trump had initially presented the agreement as a major diplomatic opening. Announcing the framework in June, he declared that the Strait would reopen and urged international shipping to resume. The agreement envisaged ending military operations, removing the US blockade of Iranian ports and restoring traffic through a waterway that carried about one-fifth of global oil and liquefied natural gas flows before the war.

That optimism has disappeared. Trump has said there is nobody to negotiate with and has described the American blockade of Iranian ports as a “wall of steel”. He has also repeatedly claimed that Washington has “total control” over Hormuz and floated the extraordinary prospect of declaring the strait US territory. Tehran has rejected those assertions, maintaining that commercial traffic will not return to normal until its conditions are met.

Iran’s position is that the 60-day negotiating period never properly began because Washington violated the interim arrangement shortly after it was reached. Tehran says the US failed to fulfil commitments that included lifting the blockade on Iranian ports and releasing frozen assets. Washington maintains that Iran failed to deliver on a central obligation to reopen the Strait of Hormuz.

The original memorandum was intended to create a path towards a broader settlement restricting Iran’s nuclear programme while allowing sanctions to be eased. Iran possesses more than 400kg of uranium enriched close to weapons-grade levels, making the future of the stockpile one of the most difficult negotiating issues. Tehran denies seeking nuclear weapons, while Washington has demanded enforceable limits that would prevent a rapid move towards a bomb.

Control of Hormuz has become the more immediate confrontation. Traffic through the narrow passage between Iran and Oman has fallen dramatically. More than 130 ships crossed the strait each day before the war. Only a handful have been making the journey on many days this month, while tankers and other commercial vessels have faced attacks, higher insurance costs and mounting uncertainty.

Shipping slowed further over the weekend. Five commodity vessels crossed on Saturday and none was registered on Sunday, compared with 31 during the previous weekend. The UAE has accused Iran of attacking three vessels operated by Abu Dhabi National Oil Company. Tehran has not accepted responsibility for those incidents.

Iran has meanwhile moved towards formalising restrictions on vessels linked to adversaries. A parliamentary committee has approved a plan containing provisions that would bar assets and equipment associated with the US, Israel and other states classified by Tehran as hostile from using the strait. Such restrictions would challenge Washington’s insistence that international shipping must enjoy freedom of navigation.

The US has reinforced economic and military pressure. Defence Secretary Pete Hegseth has said American naval forces can maintain the blockade indefinitely by rotating ships through the region. Treasury Secretary Scott Bessent has signalled additional measures aimed at further isolating Iran financially, while US forces have continued operations against Iranian coastal radar, air defences, missile capabilities and vessels linked to attacks on shipping.

The failure to secure an agreement is again feeding directly into energy markets. Brent crude climbed towards $90 a barrel on Monday after gaining more than 5 per cent last week, while West Texas Intermediate moved above $82. Oil prices had fallen sharply when the June agreement was announced, reflecting expectations that Gulf exports would normalise. Those expectations have now largely reversed.