Iran Rejects Trump's Sunday Deadline for Strait of Hormuz Deal

Iran has signaled its disagreement with US President Donald Trump's assertion that an interim peace deal to reopen the Strait of Hormuz would be signed on Sunday. This pushback from Tehran has heightened ongoing tensions in the Middle East and amplified uncertainty across global energy markets.

President Trump had stated on his Truth Social account on Saturday that the deal was scheduled to be signed on Sunday, and immediately thereafter, the Strait of Hormuz would be "OPEN TO ALL." However, Iranian officials emphasized that nothing had been finalized regarding the agreement and that a deal would not be reached by Trump's suggested deadline. Iran's semi-official Fars News Agency, citing an unidentified official close to the negotiating team, clearly articulated Iran's position. Furthermore, according to a person familiar with the matter who spoke to Bloomberg, Iranian Supreme Leader Mojtaba Khamenei had not yet agreed to the text as of Friday.

Further escalating tensions, the Israeli military struck Lebanon's capital, Beirut, on Sunday. Israel stated the operation targeted Hezbollah, an Iranian-backed group, which introduced a new risk factor for any potential peace agreement. Iran insists that any interim deal with Washington must include a ceasefire in Lebanon, a condition Israeli Prime Minister Benjamin Netanyahu has stated he will reject until Hezbollah is disarmed and ceases its attacks on Israel.

These developments triggered volatility in global energy markets. On Friday, Brent crude oil futures fell by as much as 5.1%, reaching their lowest levels since the early days of the conflict. European natural gas prices also slumped by up to 8.4%. The global benchmark Brent crude, which had surged nearly 50% year-to-date, retreated from its late April peak of $125. In May, significant sell-offs were observed in bond markets worldwide, reflecting a decline in risk appetite.

This diplomatic effort in the Middle East aims to conclude a conflict that has adversely affected the global economy and caused widespread chaos in the region. The United States has maintained a blockade on Iranian ports since April 13. Negotiations, involving mediators such as Pakistani Prime Minister Shehbaz Sharif and Qatari envoys, include discussions on limiting Iran's nuclear program and the potential release of $25 billion in frozen Iranian assets by the US. However, conflicting information persists between the parties regarding the specifics and scope of such an agreement. President Trump's history of making numerous similar claims about imminent deals that ultimately did not materialize has fueled skepticism in the markets.

Market analysts indicate that uncertainty surrounding the outcome of these US-Iran negotiations continues. While some US officials suggest an 80-85% chance of an agreement being signed, it is known that certain hardliners in Iran aim to obstruct any diplomatic breakthrough. Even US Vice President JD Vance's pushback against Republican hawks, asserting that President Trump will achieve a favorable outcome, highlights the sensitivity of the issue within US domestic politics. In the coming period, the final details of the agreement, particularly the resolution of the situation in Lebanon, will be critically important for global energy supply and geopolitical stability.