U.S. President Donald Trump announced on Tuesday that there were no ongoing discussions with Iran and affirmed that the Strait of Hormuz was operational, counter to Iran’s claim that the crucial water passage remained closed to maritime traffic. The fading hopes of resolving the nearly six-month conflict led to an increase in oil prices once more on Tuesday, with stock markets declining and borrowing costs for major economies, including the U.S., reaching multi-decade highs amid concerns about long-term inflationary and fiscal repercussions of the crisis.
Following the expiration of a temporary ceasefire agreement on Monday, a senior Iranian official disclosed to Reuters that Iran was transitioning to a “fully offensive” military stance due to the diplomatic impasse, although there were no reports of new attacks from either side on Tuesday. Trump stated in a post on Truth Social that there were no ongoing or scheduled talks with Iran and emphasized the continuation of the Naval Blockade, while asserting that the Strait of Hormuz was free of water mines.
Jared Kushner, Trump’s son-in-law and special envoy, expressed optimism on Monday, indicating that talks with Iran were still in progress and were potentially more robust than before. The conflict, initiated by joint U.S.-Israeli strikes on Iran, has evolved into a stalemate, with Iran threatening shipping in the strait and Washington warning of potential renewed attacks if negotiations fail to produce a lasting resolution. A key U.S. objective is to prevent Iran from obtaining a nuclear weapon, a task deemed challenging without addressing the enriched uranium believed to be concealed at previously targeted sites.
Despite Trump’s assertions of improvements in the Gulf situation, reports of attempts to disrupt shipping persist among countries. The United Arab Emirates’ Defence Ministry reported detecting two ballistic missiles launched from Iran, the first such incident since a strike on the Fujairah port in May. The UAE subsequently suspended various activities with Iran, citing regional tensions that jeopardize peace and security. Direct cargo shipping between the UAE and Iran had only recently resumed in late June after a suspension in March at the conflict’s outset.
Reports emerged that a vessel transiting the Strait of Hormuz was struck by an unidentified projectile on Tuesday, causing damage to the engine room and injuring a crew member. The Omani Coast Guard provided assistance to the remaining crew members, while Tehran did not immediately respond to the incident. Iranian negotiator Mohammad Baqer Qalibaf affirmed that the strait would remain closed until the U.S. fulfilled the conditions of an interim deal signed in June, encompassing demands such as lifting the blockade of Iranian ports, easing oil sanctions, releasing frozen assets, and ceasing threats and military actions.
As the conflict persists, Iran emphasizes its openness to dialogue with the U.S. while asserting that negotiations should not be equated with surrender. Iranian officials express concerns that increased economic penalties could exacerbate hardships, reignite unrest, and undermine the legitimacy of the Islamic Republic. The conflict has resulted in numerous casualties, predominantly in Iran and Lebanon, with Iran targeting U.S. military installations and infrastructure across multiple countries. Oil prices have surged during the conflict, reaching highs of $126 US a barrel, significantly above prewar levels. Brent crude futures settled slightly higher on Tuesday, reflecting ongoing uncertainty in the region. U.S. officials warn of potential further economic measures against Iran in the coming months, emphasizing the range of options available to the president.