May 22 - Pakistani officials returned to Tehran on Friday to continue efforts to mediate a possible settlement between Washington and Tehran, with Iranian state media reporting a meeting between Iran’s foreign minister and Pakistan’s interior minister focused on the latest U.S. proposals.
The semi-official Tasnim news agency said Pakistani Interior Minister Syed Mohsin Naqvi held talks with Iranian Foreign Minister Abbas Araqchi after delivering the most recent U.S. message in the negotiations. The visit followed a week of diplomatic exchanges as both sides sought common ground on a range of contentious issues.
U.S. Secretary of State Marco Rubio told reporters on Thursday there had been "some good signs" in the talks but warned there could be no deal if Tehran maintained a plan to charge passage fees in the Strait of Hormuz - a waterway Iran effectively closed to most shipping after the outbreak of the war on February 28. "There’s some good signs," Rubio said. "I don’t want to be overly optimistic ... So, let’s see what happens over the next few days."
A senior Iranian source told Reuters on Thursday that gaps between the parties had narrowed, but that uranium enrichment and the status of the Strait of Hormuz remained among the key sticking points in the negotiations.
Diplomatic contours and red lines
At the centre of the diplomatic impasse is Iran’s stockpile of highly enriched uranium. Washington asserts the material is intended for a nuclear weapon, a view Tehran rejects by saying its enrichment activities are peaceful. U.S. President Donald Trump said on Thursday the United States would ultimately recover the enriched uranium. "We will get it. We don’t need it, we don’t want it. We’ll probably destroy it after we get it, but we’re not going to let them have it," Trump told reporters at the White House.
Two senior Iranian sources said before the president’s comments that Iranian Supreme Leader Ayatollah Mojtaba Khamenei had issued a directive that the uranium should not be sent abroad. That reported directive adds a firm internal constraint on Tehran’s negotiating flexibility with regard to the material.
Control of the Strait of Hormuz is the other major impasse. Before the war, roughly one-fifth of the world’s oil and liquefied natural gas shipments passed through the strait. Since the conflict began, Iran has restricted traffic, with daily transits falling to a trickle from typical pre-war levels of 125 to 140 passages. Tehran has said it could reopen the waterway to countries it deems "friendly" if they adhere to terms that could include fees.
Both Trump and Israeli Prime Minister Benjamin Netanyahu have publicly described war aims focused on curbing Iran’s backing for regional militias, dismantling its nuclear capabilities, destroying missile forces and setting conditions they argue would facilitate political change in Iran. Iran, for its part, has retained its near-weapons-grade enriched uranium and continued to possess missile, drone and proxy militia capabilities.
Economic repercussions and market reaction
Markets have reacted to the fragile state of the talks. The U.S. dollar traded near its highest level in six weeks amid uncertainty over prospects for a diplomatic breakthrough, and oil prices rose as investors questioned the likelihood of a rapid resolution. The war has produced sharp dislocations in global energy flows, exacerbating concerns about inflation driven by higher fuel costs.
The International Energy Agency has characterized the conflict as the world’s worst energy shock and warned that peak summer demand, combined with limited new supply from the Middle East, could push the market into a so-called "red zone" in July and August.
Reflecting continuing scepticism about progress in diplomacy, market analysts pointed to a lack of decisive movement. "We’re coming to the end of week 12, we’re six weeks in the ceasefire, and I’m just not really that convinced we’re any closer to a resolution between the U.S. and Iran," said Tony Sycamore, a market analyst at IG.
Positions and proposals on the table
Tehran submitted its latest offer to Washington earlier this week. Descriptions of that package indicate it largely reiterates elements previously rejected by the U.S., including calls for control over the Strait of Hormuz, compensation for war damage, lifting of sanctions, release of frozen assets and withdrawal of U.S. troops.
U.S. officials have said continuing pursuit of tolls in the strait would scuttle any diplomatic deal. Rubio warned such a move would be globally destabilising and illegally impede an international waterway, saying it "would make a diplomatic deal unfeasible if they were to continue to pursue that. So it’s a threat to the world if they were trying to do that, and it’s completely illegal."
Outlook
Diplomats, including Pakistani interlocutors, are maintaining shuttle efforts in the hope of bridging the remaining divisions, while both sides trade public statements and hold private talks. Observers of markets and trade routes continue to watch developments closely for signs that either a diplomatic settlement or a deeper escalation is more likely. For now, fissures over uranium and the future governance of the Strait of Hormuz leave the central questions unresolved.