Iran's chief negotiator, Mohammad Bagher Ghalibaf, publicly criticized U.S. President Donald Trump for engaging in what he called 'theater diplomacy,' following conflicting statements from Washington and Tehran regarding the status of negotiations to end ongoing hostilities between the two countries. While Trump claimed that the outlines of a deal with Tehran had already been settled after calling off planned strikes, Iranian officials denied that any talks were underway [1].
The regional conflict has intensified, with Gulf energy infrastructure and vital shipping chokepoints facing renewed threats. Saudi Arabia is preparing for 'multiple coordinated attacks' by Iraqi militia factions aligned with Iran-backed Houthis, according to a Saudi official. Intelligence reports suggest these groups, under the guidance of Iran's Islamic Revolutionary Guard Corps, are planning imminent strikes on the kingdom. This follows recent Houthi-claimed attacks on two Saudi oil tankers in the Gulf of Aden and a series of missile and drone attacks on Saudi Arabia by Iran-backed Iraqi militias [1].
Shipping activity through the region's two critical chokepoints has sharply declined. Only two vessels transited the Strait of Hormuz on Wednesday, compared to eight the previous day and a pre-war average of 130 to 140 daily transits. Similarly, traffic through the Bab el-Mandeb dropped to a single dry bulk carrier from 20 vessels the day before [1].
Even if a deal is reached between Oman and Iran for managing Hormuz traffic, flows are not expected to return to pre-war levels soon. A draft plan reported by Iran's Fars news agency would bar U.S. and Israeli ships from the Strait of Hormuz, with restrictions also applying to countries that have 'caused damage' to Iran until compensation is paid. Penalties of up to 20% of cargo value are proposed for violators, though the agreement is still under review [1].
Oil markets reacted to these developments, with Brent crude futures for October delivery rising 1.3% to $83.55 a barrel and September WTI crude futures up 1.1% to $78.17 on Friday. This reversed an earlier decline that had been driven by optimism over a potential Hormuz deal [1].
CONCLUSION
Tensions between Iran and the U.S. have escalated, leading to a dramatic reduction in shipping through key Middle Eastern chokepoints and a spike in oil prices. The situation remains volatile, with no clear resolution in sight and significant risks to regional energy flows and global markets.