Iran rejects U.S. talks for now as wait for Hormuz deal drags on

Iranian Foreign Minister Abbas Araghchi, who has said a pact to establish a temporary shipping route through the global energy chokepoint was “very close,” on Sunday criticized what he described as US violations of a short-lived interim peace agreement signed in June.

“As long as the American violation of the Memorandum of Understanding continues and the US does not make amends for its violations, there is no possibility of resuming negotiations,” Araghchi was cited as saying by state TV.

Tehran on Saturday upped the ante by renewing a hefty list of demands for Washington as conditions for a full reopening of Hormuz, indicating any immediate respite for oil and gas supplies may be limited. 

The status of the Strait of Hormuz has become a key factor in the conflict the US and Israel launched on Iran in late February, and it’s unclear how Washington will respond to any agreement. US President Donald Trump has demanded the resumption of open navigation for months, regularly threatening fresh attacks on Iran if it fails to reopen the waterway. 

With a deal elusive, the situation in the Middle East stayed volatile on Sunday. Iranian-backed Houthi rebels claimed they’d struck Saudi Aramco’s Jizan oil refinery in the kingdom. Saudi authorities earlier reported a fire at the facility.

US Vice President JD Vance the day before suggested there’d been recent progress in negotiations, but it’s not clear if the final result will be satisfactory. The question is whether Iran will be able “to give the things that are necessary for us to be happy, for us to feel like we’ve gotten what we need out of this particular engagement,” he told Fox News. 

Read More: Vance Says US in ‘Middle of the Game’ in Iran Conflict

Washington has repeatedly suggested it’s part of negotiations over the management of Hormuz, which Iran disputes.

“Some intermediary countries are trying to re-establish the ground for negotiations,” Araghchi was quoted as saying on Sunday. “At present, we are not negotiating with the US — the exchange of messages is taking place through intermediaries.”

Oman, within whose territorial waters the strait also lies, said its talks with Iran were progressing in “a positive and constructive atmosphere.” In a post on X, authorities called for a halt on actions in the strait to give space for diplomatic efforts.

Besides compensation, Tehran’s demands include that the US lifts its naval blockade on Iranian ports, withdraws military forces from around Iran, removes sanctions and releases frozen assets, according to Mohammad Bagher Zolghadr, a hardliner who heads the Supreme National Security Council.

Traffic through the chokepoint has been largely blocked since the start of the war, but some ships have continued to ferry cargoes as part of a shuttle program involving US military help. 

Oil prices swung between gains and losses last week, with Brent eventually settling above $83 a barrel as traders weighed the prospects of a deal that’s expected to clear the way for the restoration of millions of barrels of supply from the Persian Gulf.

Tensions Flare

Tensions have flared in the southern Red Sea in recent weeks, with the Houthi rebels in Yemen announcing a blockade on Saudi Arabia’s ports, a key alternative export route for the kingdom’s oil.

The Houthis on Sunday claimed they’d struck the Jizan refinery with a drone in response to Saudi moves in Yemeni airspace. The Saudi energy ministry earlier said a fire there was extinguished and no one had been injured, without giving any details on the cause. Saudi Aramco wasn’t immediately available to comment. 

The blaze would be at least the second in the past month at the Aramco facility. Satellite images showed a fire at a tank in the 400,000 barrel-a-day complex in late July after the Houthis claimed to have attacked.

Any Hormuz deal will need the approval of Iran’s Supreme Leader Mojtaba Khamenei, who hasn’t been seen in public since the start of the war. 

Khamenei said on Sunday he’d met with President Masoud Pezeshkian, whose support of a ceasefire deal with the US has earned him criticism from Iranian hardliners. The two discussed the war and economy, the leader said on X.

Months of conflict have left thousands of people dead, mainly in Iran, and are shaking up security arrangements across the region.

Turkey, Saudi Arabia and Pakistan signed a trilateral defense agreement on Friday that commits each country to jointly retaliate to any outside threat posed against any one of them. The pact is seen as a broader strategic alliance between the three countries and not meant to replace other existing agreements, according to people familiar with the matter. 

Turkish Foreign Minister Hakan Fidan late Saturday said the pact could be expanded to include other regional states including Egypt.