Key Takeaways:
A proposed four-phase US-Iran understanding would halt military operations across all fronts before tackling Strait of Hormuz security, sanctions relief and nuclear talks, according to Iranian media.
Iran has outlined a four-phase roadmap for a comprehensive understanding with the US that prioritizes a full ceasefire before addressing Strait of Hormuz security, sanctions relief and nuclear negotiations, Iranian media reported Wednesday, as fighting along multiple fronts continued to escalate.
"Gold is under pressure, knocking on the $4,450 support level due to renewed clashes in the Middle East. Fading hopes of an imminent US-Iran peace deal are likely to keep oil prices elevated," said Lukman Otunuga, senior research analyst at FXTM.
Spot gold fell 0.5 percent to $4,463.74 an ounce Wednesday, while Brent crude extended gains for a third consecutive session as the US and Iran traded strikes near the Strait of Hormuz. The dollar edged up 0.1 percent. Iran's Ministry of Foreign Affairs condemned what it called "aggressive acts" by the US against an oil tanker in the Strait and a telecommunications tower on Qeshm island, warning it would use "all possible capabilities" to defend its sovereignty.
The proposed framework marks a significant departure from the nuclear-first approach of the 2015 Joint Comprehensive Plan of Action. If implemented, it could reduce the geopolitical risk premium embedded in crude prices — currently reflecting the threat to the Strait of Hormuz, which handles about 21 percent of global oil trade — while removing a key support for haven assets like gold.
Under the plan disclosed by an Iranian media outlet, Phase 1 calls for ending the war and halting all military operations across "all fronts," encompassing not just US-Iran bilateral hostilities but also proxy conflicts across the region, including Red Sea shipping lanes and Lebanon.
Phase 2 addresses four specific operational issues: Strait of Hormuz security mechanisms, lifting of the US naval blockade, oil sanctions relief and release of some frozen Iranian assets. This sequencing suggests Tehran views energy transit security as a prerequisite for broader negotiations.
Phase 3 would transition to formal talks on US sanctions and Iran's nuclear dossier, while Phase 4 establishes a joint supervisory committee to monitor compliance. Iran is pushing for "friendly and aligned countries" to sit on the committee, according to the report.
The roadmap's fate remains uncertain. The US has not publicly confirmed the framework, and hostilities have intensified rather than abated. Iran's MFA specifically held Kuwait and Bahrain accountable for allowing their territory to be used for what it called "colonial use" by US forces, warning of the right to self-defense "including striking at the sources and locations of hostile attacks."
For oil markets, the difference between a ceasefire and continued escalation is stark. The last time the Strait of Hormuz faced a sustained security threat — during the 2019 tanker attacks — crude prices spiked about 15 percent over two months before stabilizing. A successful de-escalation could unwind much of the current risk premium, while a breakdown could push Brent above $80, traders said.
Gold's failure to rally despite escalating Middle East tensions — slipping 0.5 percent Wednesday — suggests the market is pricing some probability of a diplomatic resolution, according to FXTM's Otunuga. The yellow metal's inability to hold above $4,500 reflects a broader risk-on tilt as the dollar firms.
This article is for informational purposes only and does not constitute investment advice.
