Iran Denies US Talks, Keeping 20% of Global Oil at Risk

Iran's foreign ministry said there are no negotiations with Washington, keeping the Strait of Hormuz — a conduit for roughly 20 percent of global oil — closed to vessels without Revolutionary Guard approval.

Iran ruled out negotiations with the United States on Sunday, saying its only talks cover the Strait of Hormuz with Oman, as the waterway that carries about 20 percent of global oil stays closed to ships without Revolutionary Guard approval.

"There are currently no negotiations between Iran and the US," said Esmail Baghaei, spokesman for Iran's foreign ministry, at a regular press conference. "Iran's current talks are with Oman, covering the Strait of Hormuz."

Baghaei said the strait's situation will not change significantly while Washington continues to violate the memorandum of understanding, and that the understanding with Oman "has nothing to do with reopening the Strait of Hormuz or keeping it closed," Mehr News Agency reported.

The denial undercuts President Donald Trump's claim that Tehran asked Washington to hold off on strikes after agreeing to the "immediate, complete and total" reopening of the strait. Brent crude futures rose 24 percent in July as the standoff deterred most shipping through the chokepoint, which handles about a fifth of global oil consumption.

No Deal, No Reopening

Iranian military officials dismissed Trump's assertion that Tehran requested a halt to a planned US attack as "merely another lie," with forces at the "highest level of readiness," Mehr reported. A source close to Iran's negotiating team told Fars News Agency that "no agreement has been reached on reopening the Strait of Hormuz," and that the waterway will remain closed as long as the US maintains "hostile actions." Vessels can transit only through Iran's traffic separation scheme and with authorization from the Islamic Revolutionary Guard Corps Navy, the source said.

The IRGC, which controls the forces that have repeatedly attacked shipping in the strait, is seen as a potential obstacle to any arrangement that reduces Iranian control over the waterway. Iranian negotiators such as Foreign Minister Abbas Araghchi have signaled openness to a US- and Qatari-formulated proposal in which ships would enter the Persian Gulf through Iranian waters and exit via Omani waters, according to Israeli media and the Wall Street Journal. But Baghaei said the route under discussion is "neither the northern route nor the southern route."

Oil Risk Premium Builds

The standoff has kept a risk premium in crude. Brent futures climbed 24 percent in July, and analysts polled by Reuters expect prices to rise further this year. The last time the strait faced a comparable closure threat, in 2019 after Iran seized tankers, Brent spiked more than 20 percent within weeks before retreating once shipping resumed.

Iran's acting defense minister, Majid Ibn al-Rida, said Tehran "will neither be caught off guard nor remain passive," treating US threats as "psychological and cognitive warfare" while boosting military readiness. Iran's Artesh spokesperson said the country "fully exploited" the ceasefire to import new equipment, repair damaged systems and develop new drones, including an upgraded Hadid 110 used against US bases in Gulf states.

The US military has responded in kind: CENTCOM changed the course of 35 merchant ships, disrupted two and boarded two others during its blockade of Iran, according to the BBC. US embassies across the Middle East warned citizens on Saturday to be ready to leave amid "unforeseen escalation," hours before Trump's announcement appeared to calm tensions.

For energy markets, the absence of US-Iran talks means the strait's closure — and the roughly 20 percent of global oil consumption that flows through it — remains the central risk to crude prices. If the Iran-Oman understanding collapses or the IRGC rejects the transit arrangement, Brent could extend its July gains; if a deal emerges, the premium could unwind quickly. The next signal comes as mediators, including Qatar and Saudi Arabia, press both sides toward a framework that Trump has said must be reached "rapidly."

This article is for informational purposes only and does not constitute investment advice.