The closure of the Strait of Hormuz has led to a rise in oil prices and global economic turmoil. Diplomatic efforts continue despite recent fighting in and around the contested waterway.
US Expects Iran's Response
US Secretary of State Marco Rubio stated that Washington expects a response from Iran on Friday to its proposals for an interim deal to end the Middle East conflict. Iran has accused the US of breaching the fragile ceasefire announced last month.
Recent days have seen the biggest flare-ups in fighting since the informal truce began, following Donald Trump's announcement—then rapid pause—of a new naval mission aimed at opening the strategic waterway. On Friday, US forces fired on and disabled two Iranian-flagged tankers attempting to violate the American blockade of Iran's ports.
Diplomatic Efforts Continue
Despite clashes, mediators from Pakistan have passed to Iran a brief memorandum that the US says could serve as a basis for a more solid ceasefire. Rubio, speaking in Rome, said: 'We're expecting a response from them today at some point... I hope it's a serious offer. The hope is it can put us into a serious process of negotiation.'
There have been wild swings between hope and despair as both sides test each other's resilience, seeking leverage through belligerent rhetoric and sporadic violence. Iran's Foreign Minister Abbas Araghchi accused the US of breaking the ceasefire, posting on X: 'Every time a diplomatic solution is on the table, the U.S. opts for a reckless military adventure.'
Iran's Leverage and US Blockade
Control of the Strait and the threat to restart attacks on Gulf infrastructure are Iran's main negotiation cards. The US has blockaded Iran, stopping all Iran-linked shipping from leaving the Gulf. The elimination of Iran's missile arsenal and production facilities remains a key US objective.
An Iranian official said US attacks struck an Iranian cargo vessel, wounding 10 sailors with five missing. US Central Command reported that Iranian forces launched missiles, drones, and small boats at three US warships overnight, but none were hit, and US forces destroyed the incoming threats and retaliated against land bases in Iran.
The United Arab Emirates said it responded to another Iranian missile barrage, with three people wounded after air defences engaged two ballistic missiles and three drones. Iran has launched hundreds of missiles at the UAE during the war, hitting civilian infrastructure.
Trump's Comments and Market Impact
Trump said the ceasefire was holding, but hopes for an interim deal before his trip to China now seem premature. He dismissed recent strikes as 'just a love tap' but threatened a major offensive unless agreement is reached soon.
The US proposal offers a formal ceasefire for at least 60 days, leading to talks on issues like Iran's nuclear programme. Trump warned: 'They have to understand: if it doesn't get signed, they're going to have a lot of pain.'
Despite scepticism, the possibility of a partial agreement sent global stocks to near-record highs on Thursday as oil prices dropped. On Friday, Brent crude prices rose again. The Strait normally carries a fifth of the world's oil and gas supplies; its closure has already forced fuel price rises and threatens a global recession.
Pakistani officials have expressed optimism about a potential deal. Islamabad hosted abortive face-to-face talks last month. On Monday, the US military destroyed six Iranian small boats and cruise missiles after Trump sent warships to guide stranded tankers through the waterway.
Two ships crossed under US protection, but the effort—'Project Freedom'—was shelved after 48 hours, possibly due to complaints from Kuwait and Saudi Arabia. Trump claimed he paused it to allow negotiations a better chance.
Iranian Divisions and Regional Implications
Analysts say Iranian leaders are divided over engaging in new talks. Some favour dragging negotiations closer to the US midterm elections, when the Trump administration may be under pressure to settle. However, regional diplomats believe Iran could overplay its hand, missing an opportunity to claim victory now.
Any US-Iran agreement could also lower tensions in Lebanon, where a separate truce was threatened by an Israeli strike on southern Beirut that killed a Hezbollah commander. A new Israeli strike on Friday killed four people in southern Lebanon.
Air raid sirens sounded in northern Israel after shelling from Lebanon, according to the Israeli military.
