Trump Rejects Iran's Staged Peace Proposal as Oil Prices Climb

Iran's Proposal and America's Red Lines
Tehran's latest offer suggested a phased approach to negotiations — one that would push discussions about Iran's nuclear program to a later stage, only after the active conflict ends and disputes over Gulf shipping are resolved. For Washington, that simply doesn't work. The U.S. has consistently maintained that Iran's nuclear ambitions must be addressed from the very beginning of any talks, not treated as an afterthought once other issues are settled.

The White House declined to discuss specifics, with spokesperson Olivia Wales stating that the administration would not negotiate through the press and has already made its red lines clear. The broader backdrop here matters: a previous multilateral nuclear agreement reached in 2015 had significantly restricted Iran's nuclear activities, but that deal collapsed after Trump pulled the United States out of it during his first term. Reviving any kind of lasting framework has been complicated ever since.

Diplomatic momentum had already been slipping before this latest development. A planned visit to Islamabad by Trump's special envoy Steve Witkoff and son-in-law Jared Kushner was cancelled last weekend. Iranian Foreign Minister Abbas Araqchi had travelled twice to the Pakistani capital during that same period, also visiting Oman before heading to Moscow on Monday, where he met President Vladimir Putin and received expressions of support from a long-standing regional ally.

Oil Markets Feel the Pressure
With no resolution in sight, oil markets responded swiftly. Prices extended their gains in early Asian trading on Tuesday, reflecting growing trader anxiety over crude flows through the Strait of Hormuz. Market analyst Fawad Razaqzada of City Index and FOREX.com noted that what oil traders are watching now isn't diplomatic language — it's the physical movement of crude through the strait, and that movement remains severely constrained.

The numbers tell the story clearly. Before the war broke out, between 125 and 140 ships crossed through the strait daily. In the past 24 hours, just seven have done so, according to ship-tracking data from Kpler and satellite analysis by SynMax — and none carried oil destined for international markets. At least six tankers loaded with Iranian crude have recently been turned back to Iran under the U.S. naval blockade. Iran's foreign ministry hit back sharply, calling the seizures of Iran-linked tankers nothing short of state-sanctioned piracy.

Back home, Trump faces a tougher political picture, too. His approval ratings have been slipping, and the public has heard shifting explanations for why the war was launched in the first place. Araqchi, speaking to reporters in Moscow, claimed that Trump had reached out for negotiations precisely because the U.S. has yet to achieve any of its stated goals. Senior Iranian officials have also confirmed that their staged proposal — delivered in Islamabad — envisioned a specific sequence: first, an end to the U.S.-Israeli military campaign against Iran with guarantees against resumption; then resolution of the naval blockade and the Hormuz dispute; and only after all that, broader talks on the nuclear question, with Iran still pushing for some formal recognition of its right to enrich uranium.