Diplomatic momentum toward a negotiated end to a two-month war between the United States and Iran receded over the weekend as negotiators failed to agree terms and key meetings were cancelled. President Donald Trump said Iran could place a telephone call to Washington if it wanted to negotiate, but insisted any deal must bar Tehran from obtaining nuclear weapons.
Iranian Foreign Minister Abbas Araqchi conducted shuttle diplomacy on Sunday, holding talks in Pakistan and Oman before travelling to Russia to meet President Vladimir Putin. The diplomatic movements came after Trump called off a planned visit to Islamabad by his envoys, citing what he described as excessive travel and insufficient offers from Tehran.
Markets reacted to the stalled talks: oil prices rose, the dollar edged higher and U.S. stock futures moved lower in early Asian trading on Monday. The diplomatic deadlock has left Gulf shipping impaired, with the Strait of Hormuz largely closed and Iranian ports subject to a U.S. maritime blockade.
Speaking on Fox News program "The Sunday Briefing," Trump said: "If they want to talk, they can come to us, or they can call us. You know, there is a telephone. We have nice, secure lines." He added: "They know what has to be in the agreement. It’s very simple: They cannot have a nuclear weapon, otherwise there’s no reason to meet."
Iran has repeatedly insisted it retains the right to enrich uranium for peaceful purposes, a claim that Western powers contest on the grounds that such activities could support weapons development. While a ceasefire has halted full-scale combat that began after U.S.-Israeli strikes on Iran on February 28, no settlement has been reached to end a conflict that has caused large numbers of fatalities, contributed to higher oil prices, increased inflationary pressures and clouded the global growth outlook.
Trump is confronting growing domestic pressure tied to declining approval ratings and calls to end an unpopular war. Despite military setbacks, Iran has leveraged its capacity to disrupt shipping through the Strait of Hormuz - a critical artery that normally carries about a fifth of global oil shipments - to gain negotiating leverage. Tehran has largely closed the strait while the United States has imposed a naval blockade on Iranian ports.
Araqchi met with officials in Oman on Sunday and discussed security in the strait with Sultan Haitham bin Tariq al-Said, according to Iranian state media. Iranian reporting said Araqchi emphasized the need for a regional security framework that excludes outside interference, and that his talks in Oman focused on mechanisms to ensure safe maritime transit "to benefit of all dear neighbors and the world." Iran’s semi-official Tasnim news agency said discussions in Pakistan covered proposals to implement a new legal regime over the Strait of Hormuz, claims for compensation, guarantees against renewed military aggression and the lifting of the naval blockade.
After returning to Islamabad following discussions in Oman, Araqchi departed for Russia. Iran’s ambassador in Moscow, Kazem Jalali, posted on X that Araqchi would meet President Putin "in continuation of the diplomatic jihad to advance the country’s interests and amid external threats." Jalali stated that Iran and Russia were aligned in a united front against what he described as totalitarian forces and in support of countries seeking to resist unilateralism and Western domination.
The diplomatic setback followed Trump’s decision to cancel the envoys’ trip, which he said was not justified by the level of travel and expense given an Iranian offer he judged insufficient. "Iran offered a lot, but not enough," he told reporters.
Iranian President Masoud Pezeshkian spoke by phone with Pakistani Prime Minister Shehbaz Sharif on Saturday, telling him Tehran would not engage in negotiations that were imposed under threats or blockade. An Iranian statement said Pezeshkian urged the United States to remove obstacles - explicitly mentioning the maritime blockade - before formal talks could begin to lay groundwork for a settlement.
Beyond disputes over nuclear activities and control of the strait, Washington and Tehran remain at odds on several strategic issues. The U.S. is pressing to constrain Iran’s support for proxy groups across the region, including Hezbollah in Lebanon and Hamas in Gaza, and to limit Iran’s capacity to strike U.S. allies with ballistic missiles. Iran, in turn, seeks sanctions relief and an end to Israeli operations targeting Hezbollah.
Earlier in April, U.S. Vice President JD Vance led a delegation to Islamabad for talks with Iran’s parliamentary speaker Mohammad Baqer Qalibaf; those discussions concluded without agreement. Following the cancellation of the latest diplomatic visit, two U.S. Air Force C-17 aircraft departed Pakistan carrying security personnel, equipment and vehicles used to protect U.S. officials, according to two Pakistani government sources.
Trump said there was "tremendous infighting and confusion" within Iran’s leadership. Pezeshkian, however, told reporters last week there were "no hardliners or moderates" in Tehran and that the country stood united behind its supreme leader.
The conflict has further destabilised the Middle East, with Iran striking neighbours in the Gulf and fighting renewed between Israel and Iran-backed Hezbollah in Lebanon. Iranian-linked exchanges and Israeli reprisals have continued despite the ceasefire, and Lebanese health officials reported that Israeli strikes on Sunday killed 14 people and wounded 37. The Israeli military advised residents to evacuate seven towns beyond a buffer zone that it had occupied prior to the ceasefire - an indication that tensions and localized operations persist even as a formal end to the wider conflict remains elusive.
Summary
Efforts to restart comprehensive peace negotiations between the United States and Iran encountered a setback as President Trump cancelled a diplomatic visit and Iran’s foreign minister proceeded from Pakistan and Oman to Russia for further talks. Trump reiterated that any agreement must prevent Iran from acquiring nuclear weapons, while Tehran demanded the U.S. lift obstacles such as a maritime blockade before substantive negotiations could resume. The impasse has kept the Strait of Hormuz largely closed, pushed oil prices higher and left markets uneasy.
Key points
- Diplomatic movements: Iranian Foreign Minister Abbas Araqchi visited Pakistan and Oman and was bound for Russia to meet President Putin after weekend talks failed to secure an agreement.
- U.S. stance: President Trump said Iran could call Washington to negotiate but insisted Iran must not obtain nuclear weapons; he cancelled a visit by U.S. envoys citing inadequate offers and travel concerns.
- Market and economic impact: The diplomatic impasse has contributed to higher oil prices, a firmer dollar and softer U.S. stock futures, while Gulf shipping remains disrupted by closures in the Strait of Hormuz and a U.S. naval blockade of Iranian ports.
Risks and uncertainties
- Continued disruption to global oil flows - sectors affected: energy and shipping. The partial closure of the Strait of Hormuz could sustain upward pressure on oil prices.
- Escalation of regional hostilities - sectors affected: defense and regional trade. Renewed strikes and cross-border engagements, including in Lebanon, threaten further instability.
- Diplomatic breakdown - sectors affected: financial markets and investor sentiment. With high-level talks cancelled and demands unmet, uncertainty for markets and inflationary pressures may persist.