Uncertainty over status of US-Iran talks as ship struck in Hormuz

An attack on a vessel near the Strait of Hormuz and a rebound in oil prices on Tuesday underscored doubts that the US-Iran war was nearing a resolution, as Tehran pushed back against President Donald Trump's assertion that talks were under way.

Oil prices rose nearly 3% after a steep selloff in the previous session as investors reassessed optimism over diplomacy, while a cargo vessel reported being struck by an unidentified projectile near the Strait of Hormuz off Oman's coast, according to the UKMTO maritime security agency.

Trump said on Monday that talks with Tehran were under way and Iran faced a "last chance" to reach a deal, while Iranian officials insisted no negotiations with the United States were taking place. Iran says its only talks are with Oman about the Strait of Hormuz and no major meetings are planned this week.

"They are going on right now," Trump told reporters at an Oval Office event when asked about negotiations, adding that discussions were taking place at the request of Iran, Saudi Arabia, the United Arab Emirates and Qatar.

"This is a last chance for them (Iran) to sign a good document."

'Massive attacks' canceled 

Trump's remarks followed his weekend decision to cancel what he described as "massive attacks" on Iran, repeating a pattern in which he has threatened major military action before stepping back and citing negotiations.

Iran's President Masoud Pezeshkian said Iran did not want the conflict to widen: "We defend our borders, but we do not seek to expand the war," he was quoted as saying by state media.

Iran has halted most traffic through Hormuz while Washington maintains a blockade of Iranian shipping and ports, disrupting a corridor that normally carries about a fifth of global oil and liquefied natural gas shipments.

Maritime sources said on Tuesday that the vessel struck near Hormuz was a dry bulk ship. Its crew had to abandon the vessel and one seafarer was missing, the sources said.

Traffic through Hormuz remained slow, with three tankers and three bulk carriers among the six vessels transiting the strait on Monday, down from seven the previous day, Kpler data showed. In peacetime, more than 100 ships would typically transit per day.

'Unbelievably duplicitous' 

Gulf officials and analysts say Iran is betting it can outlast Washington by turning the region's trade routes, shipping lanes and energy infrastructure into pressure points that steadily raise the cost of confrontation.

"Their big advantage is that they can hurt the regional states and the global economy," said Michael Knights of the Washington Institute.

In a post on Truth Social on Monday, Trump called Iran's leadership "unbelievably duplicitous," saying they had asked for a meeting and more talks were set for the "immediate future."

Sources in Pakistan, which has been mediating efforts to end the conflict, said attempts to bring Washington and Tehran back to the negotiating table were continuing.

"A lot is happening in the background...We are talking to both sides. Our sole goal at this moment is to make both the parties at least agree to start talking," a senior Pakistani security official said.

Repeated pattern

Monday's events appeared to fit a pattern that has emerged since Trump launched "Operation Epic Fury" alongside Israel more than five months ago. He has repeatedly threatened military action against Iran, only to later point to diplomatic contacts as a reason to step back.

Iran, however, has publicly rejected negotiations with Washington since the collapse in early July of a memorandum of understanding the two sides signed the previous month in an attempt to end the conflict.

Trump has yet to achieve the objectives he set out at the start of the war: dismantling Iran's nuclear program, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their clerical rulers.

Meanwhile, three people familiar with the data told Reuters the US Army has used up much of its stockpile of highly accurate long-range missiles during its five-month war with Iran.

The missiles are principally the Army's surface-to-surface weapons, known as Army Tactical Missile Systems and Precision Strike Missiles. The US has used "virtually all" of these weapons, according to two of the sources.

The long-range munitions are an important part of the military's arsenal, allowing accurate strikes from a safe distance. Analysts say such weapons – which cost over $1 million each – would be important in any future conflict.

Iran demands Hormuz inbound control

The dispute over Hormuz remains a central point of contention. Washington says the June memorandum required Iran to reopen the strategic waterway, while Tehran says the text explicitly preserved its authority over shipping traffic.

Indeed, under a plan being discussed with Oman to reopen the strait, Iran wants control over inbound shipping through the Strait of Hormuz and visibility over outbound traffic with the ability to intervene if necessary, a senior Iranian source said on Tuesday.

The source, who is involved in the talks, said this is "the general idea currently being discussed", and specified that the outbound lane would follow a route between Iran and Oman, with exit clearance granted through Oman after notifying Iran.

"Tehran is unlikely to change its position," the source added.

In late July, Iranian Deputy Foreign Minister Kazem Gharibabadi said Tehran had rejected an Omani proposal for an equal division of transit routes between the two countries, saying such a plan did not address Tehran's security concerns until long-term regional stability can be achieved.