(Bloomberg) — U.S. allies are reportedly pushing for a last-minute deal with Iran, as President Donald Trump extended his deadline until Tuesday for Tehran to reopen the Strait of Hormuz, keeping markets on edge over whether a breakthrough could be achieved.
Axios reported that Pakistan, Egypt and Turkey are trying to find an opportunity for a cease-fire – which lasts about 45 days – to stop the threatened US attacks on Iranian power structures and retaliation by the Islamic Republic against countries in the region.
The war continued, with Israel, Kuwait and the United Arab Emirates reporting attacks on Iran overnight into Monday.
Trump on Sunday issued a serious threat to destroy Iran’s energy plants and blow up “everything there,” before announcing what appeared to be a new deadline for Tuesday at 8 p.m., without giving details. The move adds to a series of escalations since he first made similar comments on March 21 to force Iran to open up its water policy.
The repeated delay comes as Trump pointed to ongoing talks between his envoys and Iran’s leadership, which he has yet to identify, aimed at ending the conflict sparked by US and Israeli strikes in late February.
The war has left thousands of people dead, most of them in Iran and Lebanon, and has brought shipping through the Strait of Hormuz – through which about a fifth of the world’s oil and natural gas output usually flows – to a grinding halt.
Signs of last-ditch efforts to halt the war helped investors return to financial caution, with the MSCI Asia Pacific Index up 0.3% and crude oil gains. Many European markets are closed.
Iran has rejected Trump’s latest decision to reopen Hormuz, saying it will resume full operations once war damages are paid.
Tehran continued to hit energy targets in its Persian Gulf neighbors, including Kuwait’s oil headquarters and a major petrochemicals plant in Abu Dhabi over the weekend. The UAE issued multiple warnings overnight, while Kuwait said its air defenses had repelled missile and drone attacks.
The Israel Defense Forces said Iran had fired four waves of missiles since midnight, and emergency services said they had found two bodies in a house that had been hit earlier in Haifa.
Fifteen ships have passed through the Strait of Hormuz with Iran’s permission in the past 24 hours, the Fars news agency reported, which is still 90% less than before the war. It did not specify whether the boats were private or where they were going.
Oil prices rose after Trump’s latest warnings, with Brent (BZ=F) trading around $110 a barrel at 6:30 a.m. in London after paring earlier gains. The global toll has risen by more than 50% since the start of the conflict.
In the United States, the average price of gasoline in the country has risen to $ 4 a gallon for the first time since 2022. Crossing that important psychological threshold brings a political risk to the Trump administration and the Republicans, while consumers are more concerned about the cost of living before the mid-November period.
Trump said he plans a press conference at 1pm on Monday.
But it will not be easy for either side to end the conflict. Both the US and Iran have rejected each other’s demands, while Israel has made it clear that it wants to destroy Tehran’s military power.
If the negotiations would result in a “significant delay” in Iran’s nuclear program and the removal of enriched uranium “then it would be a positive outcome,” Israeli Defense Minister Zeev Elkin told Kan radio on Monday. But it doesn’t seem like the Iranians are there.
Israel assesses that Iran still has more than 1,000 missiles capable of reaching its territory, while the Hezbollah army in Lebanon includes about 10,000 short-range rockets, according to military information cited by Israeli media over the weekend. The Israeli army is fighting a similar war in Lebanon against Iran-aligned Hezbollah.
More than 5,000 people have been killed in the conflict, nearly a third of them in Iran, according to government agencies and the US-based Center for Human Rights. More than 1,400 people have been killed in Lebanon, and many more have died across the Gulf Arab states and Israel.
The US over the weekend rescued a plane from Iran in an operation that involved several planes in the mountainous region of the Islamic Republic.
The mission followed the downing of a US military plane and lasted two days, involving hundreds of special operations troops, with US planes dropping bombs and shooting at Iranian vehicles to keep them away from the pilot’s hideout, the New York Times reported.
House Intelligence Chairman Rick Crawford, Republican of Arkansas, said on Fox News’ Sunday Morning Futures that the US did not sustain casualties but destroyed “two planes” on the ground in Iran to prevent them from falling into enemy hands.
The establishment of the US airlines shattered the aura of invincibility Trump sought to create.
Oil prices have been battered by the conflict and rising costs of commodities such as jet fuel and diesel threaten a renewed wave of inflation. OPEC+ members raised their production rates for May, symbolically as the war curbed production and exports from several of the alliance’s biggest members.
Iran announced Saturday that Iraq would not be exempt from its restrictions on shipping through the fence, which allows up to 3 million barrels per day of Iraqi oil supplies. An Iraqi official issued a cautious warning, saying the extent would depend on whether shipping companies were willing to take the risk of entering the truck.
The Suezmax Sea Thunder, an oil tanker that had loaded its cargo at Iraq’s Basrah airport in early March, derailed en route to Malaysia, according to tanker data compiled by Bloomberg. Such ships can carry up to a million barrels of crude oil.
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