Confusion over the state of talks between the United States and Iran deepened on Tuesday, as conflicting statements from Washington and Tehran left the trajectory of their five-month war unclear, even as a fresh attack on shipping in the Strait of Hormuz underscored how much is still at stake for global energy markets. President Donald Trump told reporters Monday that negotiations with Iran were actively under way, framing the moment as a final opportunity for Tehran to reach an agreement. Iranian officials, however, flatly denied that any such talks were happening, let alone planned. Two governments, two very different accounts “They are going on right now,” Trump said during an Oval Office event when asked about the status of negotiations. He said the discussions were taking place at the request of several regional powers, including Iran itself, along with Saudi Arabia, the United Arab Emirates and Qatar. “This is a last chance for them to sign a good document,” he added. The remarks followed Trump’s decision over the weekend to call off what he described as “massive attacks” he had authorized against Iran, citing the prospect of talks as the reason for standing down. It was not the first time he has taken that approach. Over the course of the conflict, Trump has repeatedly threatened major military action only to pull back at the last moment, often pointing to diplomatic openings as justification. Iran’s account of events told a different story entirely. Foreign Ministry spokesman Esmail Baghaei said earlier Monday that no negotiations with the United States were taking place and that none were scheduled. He said Iran had no intention of hosting foreign delegations or dispatching negotiators abroad in the near term. According to Baghaei, every Iranian negotiator remained inside the country, with the exception of Foreign Minister Abbas Araqchi, who was on a religious pilgrimage in Iraq at the time. The only active discussions Iran acknowledged, he said, involved Oman, and concerned management of the Strait of Hormuz rather than any broader settlement with Washington. A dangerous strait grows more dangerous While the two sides disputed whether talks existed, activity in the Gulf offered its own signal. A cargo vessel reported being struck by an unidentified projectile near the strait off Oman’s coast, according to the United Kingdom Maritime Trade Operations agency. The incident added to an already tense standoff in the waterway, which handles roughly a fifth of the world’s crude oil and natural gas shipments and has seen transit slow to a crawl since Iran effectively blockaded the route earlier in the conflict. Shipping data from Kpler showed just six vessels, three tankers and three bulk carriers, passed through the strait on Monday, down from seven the day before. The steady decline in traffic reflects how thoroughly the conflict has disrupted one of the world’s most important energy corridors, even as diplomatic signals suggest the two sides may be inching toward some kind of resolution. Markets respond to hope, not certainty Despite the mixed messages out of Washington and Tehran, financial markets moved as though de-escalation were within reach. Brent crude futures dropped roughly 7 percent Monday, settling around $83.77 a barrel, while the Dow Jones Industrial Average closed at a record high. Asian stocks and oil prices ticked higher again on Tuesday, suggesting investors were, for the moment, betting on easing tensions rather than further conflict. That optimism sits somewhat uneasily alongside the assessment offered by regional analysts, who argue Iran is playing a longer game. Gulf officials and outside experts say Tehran appears to be counting on its ability to outlast Washington by using the region’s trade routes, shipping lanes and energy infrastructure as leverage, steadily raising the cost of continued confrontation until the United States and its allies conclude that accommodation is cheaper than containment. “Their big advantage is that they can hurt the regional states and the global economy,” said Michael Knights of the Washington Institute, describing the strategic logic behind Iran’s approach to the standoff. Trump’s Truth Social broadside Later Monday, Trump escalated his rhetoric toward Tehran in a post on Truth Social, describing Iran’s leadership as “unbelievably duplicitous.” He claimed Iranian officials had requested a meeting and that additional talks were scheduled for the “immediate future,” a claim that stood in direct contradiction to Baghaei’s statement earlier the same day. Trump also reiterated his assertion that the U.S. Navy maintains full control over the Strait of Hormuz, writing: “‘The United States Wall of Steel!’ Nothing gets through to Iran, unless we want it to, and nothing will get through, unless a Deal, or Total Surrender, is accomplished.” The statement reflects the maximalist framing Trump has used throughout the conflict, even as the practical reality in the strait, marked by attacks on shipping and sharply reduced vessel traffic, suggests a more contested and volatile picture than “total control” would imply. A pattern that keeps repeating Monday’s contradictory signals fit a broader pattern that has defined the war since Trump launched “Operation Epic Fury” alongside Israel more than five months ago. Trump has threatened significant military escalation on multiple occasions, only to step back and cite diplomatic contacts as the reason. Iran, for its part, has publicly refused to negotiate with Washington since a memorandum of understanding the two countries signed in June collapsed in early July. That collapse remains a central point of dispute between the two governments. Washington has argued the memorandum required Iran to reopen the Strait of Hormuz to normal shipping traffic. Tehran counters that the agreement’s text explicitly preserved Iran’s authority over traffic through the waterway, leaving the two sides with fundamentally incompatible readings of the same document. Five months into the conflict, Trump has yet to achieve any of the objectives he laid out at its outset: dismantling Iran’s nuclear program, curbing Tehran’s capacity to strike regional rivals, and creating the conditions for Iranians to overthrow their clerical leadership. Each round of U.S. pressure has instead been met by escalating Iranian responses targeting American forces in the region, Washington’s Gulf Arab allies, and commercial shipping, responses that have, so far, each ended with Trump stepping back from further escalation rather than following through. What comes next remains uncertain The disagreement over whether talks are even taking place captures the broader difficulty of assessing where the conflict stands. Trump’s public statements point toward imminent diplomacy and a possible resolution. Iran’s public statements point toward continued stalemate, with only narrow, technical discussions occurring through Oman regarding the strait itself. Markets, for now, appear to be pricing in the more optimistic version of events. But the attack on shipping near Hormuz, combined with the sharp drop in vessel traffic through the strait, suggests that whatever diplomatic movement may or may not be occurring, the practical risks to global energy flows have not meaningfully eased. Until Washington and Tehran can agree on the basic facts of their own negotiations, let alone the substance of any deal, the strait, and the wider region, are likely to remain a flashpoint capable of unsettling markets on short notice.
