Trump weighs Iran ceasefire extension as Hormuz dispute clouds deal
Synopsis
Donald Trump is weighing a proposed 60-day Iran ceasefire extension but insists Tehran reopen the Strait of Hormuz and abandon any path to a nuclear weapon before approving a deal.
US President Donald Trump said he will soon decide whether to approve a proposed agreement to extend the ceasefire with Iran, though major differences remain between Washington and Tehran on key issues including nuclear restrictions and access to the Strait of Hormuz. The proposal would extend the truce first reached in April by another 60 days, giving negotiators additional time to pursue a broader agreement aimed at ending months of conflict that have destabilised energy markets and heightened geopolitical tensions.
Key highlights
- Trump says he will soon decide on a proposed 60-day Iran ceasefire extension
- White House confirms Situation Room meeting but offers no decision
- Washington demands unrestricted shipping through the Strait of Hormuz
- Iran rejects US characterisation of negotiations and disputes key terms
- Reports suggest discussions include sanctions relief and frozen assets
- Oil prices fell while global equities gained on hopes of a breakthrough
White House Reviews Proposal
Trump said on Friday he would make a "final determination" on the proposed agreement following a high-level meeting in the White House Situation Room.
A White House official confirmed the meeting lasted roughly two hours but declined to say whether a decision had been reached.
"President Trump will only make a deal that is good for America and satisfies his redlines. Iran can never possess a nuclear weapon," the official said.
A senior Iranian source told Reuters that negotiations were progressing and an agreement was close, although final approval had not yet been secured.
Hormuz Becomes Key Sticking Point
Trump signalled that reopening the Strait of Hormuz remains a central US demand.
He said Iran must guarantee unrestricted shipping through the strategic waterway and abandon any capacity to develop a nuclear weapon.
"Iran must agree that they will never have a Nuclear Weapon or Bomb. The Hormuz Strait must be immediately open, no tolls, for unrestricted shipping traffic, in both directions," Trump said.
The strait is one of the world's most important energy corridors, carrying a major share of global oil and liquefied natural gas exports.
Tehran Pushes Back
Iranian officials disputed several elements of Trump's remarks.
Iran's semi-official Fars news agency described the comments as an attempt to present a "fabricated victory", while a senior Iranian source said the proposed agreement does not include nuclear-related provisions.
Foreign Ministry spokesperson Esmaeil Baghaei said decisions regarding management of the Strait of Hormuz would be determined by Iran and Oman rather than Washington.
Fars also reported that shipping access would be restored under Iranian conditions once the United States gradually lifts its blockade on Iranian vessels.
Sanctions and Frozen Assets in Focus
Reports from Iranian media suggested discussions include the release of approximately $12 billion in frozen Iranian assets.
However, Trump rejected suggestions that financial concessions had been approved.
He stated that no money would be exchanged "until further notice", creating fresh uncertainty over whether sanctions relief or asset releases will ultimately form part of any final agreement.
US Treasury Secretary Scott Bessent also indicated that any removal of restrictions on Iranian shipping would occur gradually.
Markets Welcome Signs of Progress
Financial markets responded positively to reports of a potential breakthrough.
Oil prices moved lower on expectations that a reopening of the Strait of Hormuz could restore disrupted energy flows and ease supply concerns, while global equities advanced as investors welcomed the prospect of reduced geopolitical risk.
The conflict has pushed energy prices sharply higher since February, contributing to inflation pressures across major economies.
Political Pressure Builds on Trump
The proposed agreement comes as Trump faces competing political pressures ahead of November's congressional elections.
Higher fuel prices have increased pressure on the administration to restore stability to global energy markets and reopen the Strait of Hormuz.
At the same time, some foreign policy hawks within Trump's political base remain sceptical of any agreement that could be viewed as a concession to Tehran.
Wider Regional Tensions Persist
Despite progress in ceasefire negotiations, broader regional issues remain unresolved.
Iran continues to seek sanctions relief, the release of frozen assets and a reduction in the US military presence in the region.
Tehran has also linked any lasting peace arrangement to an end to Israeli military operations against Hezbollah in Lebanon.
Fighting between Israel and Hezbollah has continued, with both sides reporting casualties and major displacement in southern Lebanon.
What Happens Next?
Trump is expected to announce his decision on the proposed ceasefire extension in the coming days.
If approved, the agreement would extend the truce for another 60 days while negotiators continue discussions on shipping access, sanctions relief, nuclear issues and regional security arrangements.
Any breakthrough could help stabilise global energy markets, though substantial differences between Washington and Tehran still need to be resolved before a comprehensive peace deal can be achieved.
FAQs
Q1: What is the proposed US-Iran agreement?
The proposal would extend the existing ceasefire between the United States and Iran by 60 days while both sides continue negotiations on broader issues.
Q2: Why is the Strait of Hormuz important?
The Strait of Hormuz is a critical global energy route through which a large portion of the world's oil and LNG exports pass.
Q3: Has Trump approved the deal?
No. Trump said he is reviewing the proposal and will make a final decision after consultations with national security advisers.
Q4: What does Iran want from the negotiations?
Iran is seeking sanctions relief, access to frozen assets, reduced US restrictions on shipping and broader security guarantees.
Q5: How have markets reacted?
Oil prices fell and stock markets rose on expectations that a deal could reduce supply risks and ease tensions in the Middle East.
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