Iran Says Islamabad MOU Has No 60-Day Deadline, Hormuz Talks Stall

Iran said the 60-day negotiating window under the Islamabad memorandum is moot after the United States breached the deal, keeping the Strait of Hormuz closed and Brent crude near $89 a barrel.

"The United States violated the memorandum, and the fighting resumed. Therefore, there was no 60-day ceasefire that needed to be extended," said Seyed Abbas Araghchi, Iran's foreign minister.

The Islamabad memorandum, signed June 17 after mediation by Pakistan and Qatar, gave Washington and Tehran 60 days to negotiate a final settlement covering the Strait of Hormuz, the US naval blockade, sanctions and Iran's nuclear program. Talks in Switzerland unraveled within weeks as each side accused the other of violations, and military hostilities resumed in July. Shipping through the strait, which carries about a fifth of global oil supplies, has slowed to a trickle — Reuters reported five vessels passed Saturday and none Sunday, versus 31 the prior weekend — while Brent crude rose as high as $89.40 a barrel Monday.

Iran has set six conditions for renewed talks, including a permanent end to US attacks, lifting the blockade and sanctions, the withdrawal of US forces from Iran's vicinity, compensation for war damage and the unconditional release of frozen assets. Pakistan and Qatar continue to shuttle messages between the sides, but Araghchi said those contacts do not constitute negotiations, leaving the world's most important oil chokepoint shut with no clear path to reopening.

Hormuz Talks With Oman Advance

Iran's foreign ministry spokesperson Esmaeil Baghaei said Saturday that Tehran and Muscat reached an agreement on a shipping route map for the Strait of Hormuz after three months of technical talks, though he stressed the arrangement was separate from any decision to reopen the waterway. "The routes that existed previously are no longer functional, so a new route needs to be defined," Araghchi said, adding that full restoration of security depends on an end to what Tehran calls illegal US actions, military threats and the naval blockade.

The dispute over the deadline's meaning has itself become a flashpoint. Pakistani government sources told Anadolu last week that Washington and Tehran had agreed to extend the period beyond Aug. 17, a claim Iran rejected. Washington reportedly views the expiry as the end of a ceasefire, while Tehran insists the memorandum concerned ending the war rather than a temporary truce.

The standoff has drawn increasingly bellicose rhetoric. President Donald Trump said Friday he would "pretty soon" declare the Strait of Hormuz a territory of the United States, prompting Iran's deputy foreign minister, Kazem Gharibabadi, to respond that the strait "cannot be seized by tweet, nor by aircraft carrier, nor by issuing an order." An Iranian Revolutionary Guard official said Tehran could shift toward a more "offensive" military posture as the deadline passed.

Gulf producers are already adapting to the closure. Abu Dhabi's Adnoc announced an $8 billion gas expansion as it weighs a Hormuz bypass, according to Middle East Eye, while the disruption has raised concerns about supplies from Gulf producers and contributed to higher global energy prices. Iran and Oman, the two coastal states bordering the strait, have continued technical talks on a new navigation framework even as the broader diplomatic track remains frozen.

The last time the strait faced sustained disruption, in 2019 after attacks on tankers, traffic recovered within months as tensions eased. The current closure, in place since Feb. 28 following joint US-Israeli strikes, has already lasted nearly six months, longer than any previous disruption. With the waterway normally handling about 25 percent of global seaborne oil trade, each week of closure tightens the supply picture for Gulf producers and keeps a risk premium embedded in crude prices.

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