Washington, United States. Hopes for a peace deal on Iran faded on Tuesday after Donald Trump said a ceasefire with Iran was “on life support” as Tehran rejected a U.S. proposal to end the conflict. Iran maintained a list of demands that Trump described as “garbage”.
Iran’s demands and ceasefire outlook
Iran called for an end to the war on all fronts, including Lebanon, where U.S. ally Israel is fighting Iran-backed Hezbollah militants. Tehran also emphasized its sovereignty over the Strait of Hormuz, demanded compensation for war damage, and called for an end to the U.S. naval blockade, among other conditions.
Trump said Iran’s response threatened the status of a ceasefire that began on April 7. “I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it,” Trump told reporters, adding to remarks he has made while repeatedly threatening to end the ceasefire.
The United States had proposed an end to fighting before starting talks on more contentious issues, including Iran’s nuclear program.
Oil prices and Strait of Hormuz disruption
Brent crude oil futures extended gains in early Asian trade on Tuesday, climbing above $104.50 a barrel, as the deadlock left the Strait of Hormuz largely closed. Before the war began on February 28, the waterway carried one-fifth of the world’s oil and liquefied natural gas shipments and has since become a central pressure point in the conflict.
Disruption caused by the near-closure of the strait has forced oil producers to cut exports, and OPEC oil output dropped further in April to the lowest in more than two decades, according to a Reuters survey reported on Monday.
Traffic through the Strait of Hormuz is at a trickle compared with before the war. Shipping data on Kpler and LSEG showed three tankers laden with crude exited the waterway last week with trackers switched off to avoid an Iranian attack.
Sanctions and upcoming Beijing visit
The United States on Monday imposed new sanctions on individuals and companies it said were helping Iran ship oil to China, part of efforts to cut off funding for Tehran’s military and nuclear programs, while also warning banks about attempts to evade existing curbs.
Trump is expected to arrive in Beijing on Wednesday, where Iran is set to be among the topics discussed with Chinese President Xi Jinping.
What do you think are the key obstacles to reaching a ceasefire agreement between the United States and Iran?