Trump signals renewed push for Iran agreement amid regional calm

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U.S. Iran contacts continue

Highlights

Trump sees a credible chance for a U.S.-Iran agreement.
Iran says formal negotiations have not started.
The pause in strikes has reduced immediate escalation risks.
Brent is trading at $85, while WTI stands at $82.

According to Bloomberg, Trump said indirect contacts between Washington and Tehran were continuing and suggested that an agreement remained possible if both sides were willing to compromise. Iranian officials, however, insisted that while messages may be exchanged through intermediaries, structured negotiations have not yet begun, leaving the outlook for a breakthrough uncertain.

Diplomatic window opens, but regional risks persist

The latest pause in U.S. military operations marks the third consecutive day without new strikes on Iranian targets, easing immediate fears of a broader conflict across the Middle East. Trump nevertheless warned that military action remains an option should diplomatic efforts collapse.

Iran has also scaled back its retaliation against U.S. interests in the Gulf following Washington's decision to suspend attacks. At the same time, Oman continues to mediate between the two countries while facilitating discussions aimed at restoring commercial navigation through the Strait of Hormuz, a key artery for global energy supplies.

Regional tensions remain elevated despite the temporary lull. Yemen's Iran-backed Houthis claimed responsibility for fresh drone attacks targeting Saudi oil facilities, while Saudi authorities reported intercepting several unmanned aircraft approaching petroleum infrastructure. The incidents illustrate that the security environment remains fragile even as Washington and Tehran explore diplomatic channels.

Oil retreats as markets price out immediate escalation

Financial markets reacted positively to the reduced risk of an immediate military confrontation. Brent crude was trading at $85 per barrel on Tuesday morning, while West Texas Intermediate (WTI) stood at $82, extending losses after Monday's sharp selloff.

The decline marks a dramatic reversal from last week, when Brent briefly surged above $100 per barrel after attacks on commercial vessels in the Red Sea raised fears that the conflict could disrupt global oil supplies. As concerns over an immediate escalation eased, investors shifted their attention back toward diplomatic developments rather than potential supply shocks.

What markets will watch next

The coming days are likely to determine whether the current pause develops into meaningful negotiations or proves to be another temporary break in hostilities. Investors remain focused on diplomacy, regional security and shipping routes, all of which continue to influence energy markets.

Israeli Prime Minister Benjamin Netanyahu is expected to meet Trump in Washington, with Iran's nuclear program and broader regional security expected to dominate the agenda. Any signs of progress or renewed confrontation could quickly reshape market expectations after oil prices experienced one of their sharpest swings in recent months.

We have previously highlighted that Hormuz shipping slows as the U.S.-Iran conflict widens.

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