Iran has demanded the release of frozen assets and an end to US naval blockades after President Donald Trump rejected Tehran’s terms for peace negotiations, raising fears of renewed conflict in the Gulf and further disruption to global oil supplies.
Trump dismissed Iran’s counteroffer as “TOTALLY UNACCEPTABLE” in a social media post on Monday, following Tehran’s response to the latest US peace proposal.
The breakdown in talks sent crude oil prices surging by more than 4% before retreating slightly in afternoon London trading. The exchange dashed hopes for a quick resolution to the crisis that has closed the Strait of Hormuz to most commercial shipping.
Foreign ministry spokesman Esmaeil Baqaei told reporters Iran had called for an end to the US naval blockade and to the war “across the region”, implying a halt to Israel’s strikes on Hezbollah in Lebanon.
“We did not demand any concessions. The only thing we demanded was Iran’s legitimate rights,” Baqaei said, adding that Iran wants the “release of assets belonging to the Iranian people, which have for years been unjustly trapped in foreign banks”.
Energy crisis could last years
Amin Nasser, chief executive of Saudi oil giant Aramco, warned investors the crisis could extend well into next year.
“The energy supply shock that began in the first quarter is the largest the world has ever experienced,” Nasser said. “If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalisation will last into 2027.”
In peacetime, a fifth of the world’s oil and liquefied natural gas exports pass through Hormuz.
Famine warning
Beyond energy, the conflict threatens global food supplies. Much of the world’s fertiliser comes from Gulf ports now affected by the blockade.
Jorge Moreira da Silva, executive director of the United Nations Office for Project Services, warned of imminent crisis.
“We have a few weeks ahead of us to prevent what will likely be a massive humanitarian crisis,” he told AFP. “We may witness a crisis that will force 45 million more people into hunger and starvation.”
Nuclear issue remains
Israeli Prime Minister Benjamin Netanyahu told CBS’s 60 Minutes programme the conflict would not end until Iran’s nuclear facilities are destroyed.
“It’s not over, because there’s still nuclear material – enriched uranium – that has to be taken out of Iran,” he said. “There’s still enrichment sites that have to be dismantled.”
The Wall Street Journal reported that Iran’s counter-proposal included diluting some highly enriched uranium, with the remainder transferred to a third country. Iran sought guarantees the transferred uranium would be returned if negotiations failed or Washington abandoned the agreement, sources told the newspaper.
The US, Israel and their allies have long accused Iran of seeking an atomic bomb. Tehran has repeatedly denied the accusation.
Military tensions rise
The US Navy has blockaded Iran’s ports, at times firing on ships to disable them or boarding and diverting vessels. Iran is restricting maritime traffic through Hormuz and setting up a payment mechanism to charge tolls for crossing ships.
US officials said it would be “unacceptable” for Tehran to control the international waterway.
Ebrahim Rezaei, spokesman for the Iranian parliament’s national security commission, issued a warning on Sunday.
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“Our restraint is over as of today,” he said in a social media post. “Any attack on our vessels will trigger a strong and decisive Iranian response against American ships and bases.”
Trump is expected to raise the Iran issue with Chinese President Xi Jinping when he visits Beijing on Thursday, according to a senior US official. China is a major buyer of Iranian oil.
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