Six weeks since Trump paused Operation Epic Fury for a ceasefire, talks to end the war have largely stalled.
Iran submitted a new offer to the US this week, but its public accounts of it repeat terms previously rejected by Trump, including demands for control of the Strait of Hormuz, compensation for war damage, lifting of sanctions, release of frozen assets and the withdrawal of US troops from the area.
Trump said on Monday, and again on Tuesday, that he had come close to ordering a new bombing campaign but had put it off at the last minute to give more time for diplomacy.
“I was an hour away from making the decision to go today,” Trump told reporters at the White House on Tuesday.
Iran has repeatedly threatened to retaliate for any new attacks by striking countries in the Middle East that house US bases. On Wednesday it suggested it would also hit targets further afield.
“If aggression against Iran is repeated, the promised regional war will extend beyond the region this time,” the Revolutionary Guards said in a statement carried on state media.
In the latest diplomacy, Iran’s Tasnim news agency reported that Pakistan’s interior minister had arrived in Tehran. Pakistan hosted the only round of peace talks last month and has been conveying messages between the sides.
Trump is under pressure to end the war, with soaring energy prices hurting his Republican Party ahead of congressional elections in November. Since the ceasefire, his public comments have veered from threats to restart bombing to declarations that a peace deal was at hand.
Despite saying he had come close to restarting the war on Tuesday he also said negotiations were going well and it would be over “very quickly”. Vice President JD Vance, who led the US delegation at last month’s sole round of peace talks, also talked up progress, saying “We’re in a pretty good spot here.”
The fluctuating US stances have sent oil prices bouncing from hour to hour and day to day, though on a clear upward trend week by week. Benchmark one-month Brent crude futures eased about 2.75% on Wednesday morning to near US$108 a barrel.
“Investors are keen to gauge whether Washington and Tehran can actually find common ground and reach a peace agreement, with the US stance shifting daily,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Ceasefire mostly holding
The US-Israeli bombing killed thousands of people in Iran before it was suspended in a ceasefire in early April. Israel has also killed thousands more and driven hundreds of thousands from their homes in Lebanon, which it invaded in pursuit of the Iran-backed Hezbollah militia. Iranian strikes on Israel and neighbouring Gulf states have killed dozens of people.
The Iran ceasefire has mostly held, though there was a spike in attacks on shipping and on Gulf states in early May when Trump announced a naval mission to reopen the strait, only to call it off after just 48 hours.
This week saw a new volley of drones launched at Saudi Arabia and the UAE, which said they came from Iraq where militia allied to Iran operate. Jordan reported shooting down a drone on Wednesday.
Trump and Israeli Prime Minister Benjamin Netanyahu said when they launched the war that their aims were to curb Iran’s support for regional militias, dismantle its nuclear programme, destroy its missile capabilities and make it easier for Iranians to topple their rulers.
But Iran has so far retained its stockpile of near-weapons-grade enriched uranium, and its ability to threaten neighbours with missiles, drones and proxy militias. Its clerical rulers, who put down a mass uprising at the start of the year, have faced no sign of organised opposition since the war began.