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Stalled diplomacy tends to keep a risk premium in crude, and the reported US view that major combat could resume after the midterms gives oil a longer-dated supply risk to price even as physical flows recover. Part of Tuesday’s early softening in crude was linked to signs that diplomacy remained possible, so a stall removes some of that support. The US naval blockade sits at the centre of Iran’s demands, which means any movement on it would matter for shipping and export flows. The swing between optimism and denial within a single day on Monday also points to headline-driven volatility, with traders likely to react to each new statement from Washington and Tehran.
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A week of Qatari shuttle diplomacy has left the US and Iran no closer, and with each side convinced it holds the stronger hand, the market is left weighing a long stalemate against renewed combat.
Summary:
- Axios, citing three sources, reported that Qatari mediation this week has made little progress, with neither the US nor Iran willing to budge.
- Qatari mediator Ali al-Thawadi met Iranian Foreign Minister Abbas Araghchi in New York on Monday, then held talks in Washington with Trump envoy Jared Kushner, with Vice President Vance attending part of the meeting.
- The Qatari plan is a two-page compromise aimed at Iran’s demand to lift the US naval blockade and Washington’s demand for nuclear concessions.
- US officials briefed on Monday morning that talks were positive, but hours later Trump said he had offered Iran nothing.
- Iran says it will consider nuclear concessions only after the US agrees to return to the June memorandum of understanding, while Secretary of the Supreme National Security Council Mohsen Rezaei said Trump is unable to decide.
- US officials think Trump could order a return to major combat operations after the midterms, and Qatari officials will keep trying but are growing frustrated with both sides.
Qatari efforts this week to broker a diplomatic breakthrough between the United States and Iran have made little progress, with neither side prepared to move, according to Axios, which cited three people familiar with the talks. The stalemate has strengthened the belief on both sides that renewed military conflict is becoming more likely, and US officials think President Donald Trump could order a return to major combat operations after the midterm elections.
Qatari mediator Ali al-Thawadi met Iranian Foreign Minister Abbas Araghchi and his team in New York on Monday for several hours, and a source said they discussed a two-page Qatari compromise proposal. Two other sources said the plan was designed to address both Iran’s demand for the lifting of the US naval blockade and Washington’s demand for Iranian nuclear concessions. Al-Thawadi then held talks in Washington on Monday evening with Trump envoy Jared Kushner and other US officials, with Vice President JD Vance joining a small part of the meeting. The White House declined to comment.
The day began on a more hopeful note. US officials briefed several outlets, including Axios, that the talks were positive and constructive and that Iran had signalled flexibility on nuclear issues, and they said Trump was willing to offer sanctions relief and release frozen funds in exchange for concrete steps to pare back Iran’s nuclear program. Several hours later, while the Qatari delegation was still at the White House, Trump posted on Truth Social that he had offered Iran nothing. One source said there was no significant movement on Monday, describing the talks as stuck, with Iran seeking things the US cannot accept and the US believing it is winning.
Other regional mediators, including Pakistan and Egypt, urged Iran to accept nuclear concessions, but Tehran said it would consider doing so only after the US agrees to return to the June memorandum of understanding, another source said. Iran’s Supreme National Security Council Secretary Mohsen Rezaei said on Tuesday, according to Iranian media, that Tehran has conveyed its terms and that Trump is unable to make a decision, adding that he is caught between negotiating and fighting. Trump told reporters the same day that Iran is doing very poorly, that he is unsure whether it is ready to give up but believes it will, and that Iran will not have a nuclear weapon.
The next step is unclear. Two sources said Qatari officials will keep trying but are growing increasingly frustrated with both sides, and no new round of talks was reported. The US naval blockade and the status of the June memorandum look likely to be the key tests of whether any opening exists, while the reported US view that combat could resume after the midterms gives the stalemate a possible political deadline.
Qatar LNG
This article was written by Eamonn Sheridan at investinglive.com.
