Iran Says No Progress on Reviving Interim Peace Deal With US As Tensions Rise
Stalled Negotiations and Rising Tensions Between Iran and the US
(Refiles Aug 12 story to fix hyperlinks in penultimate paragraph, no change to text)
By Parisa Hafezi and Elwely Elwelly
Background of the Interim Deal
DUBAI/WASHINGTON, Aug 12 (Reuters) - Iran and the United States remain at loggerheads over efforts to agree a permanent end to the war in the Gulf, according to a senior Iranian source, who said there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it.
The comments came as U.S. President Donald Trump issued yet another broadside against Iran's leaders, dealing a further blow to hopes for a resolution to the crisis, following new attacks on shipping in the region on Tuesday.
The deal agreed in June declared an "immediate and permanent termination of military operations on all fronts", but quickly unravelled, with Trump saying it was "over" on July 7 and Iran's foreign ministry declaring it "suspended" a week later.
Disputes Over Commitments
The U.S. accuses Iran of failing to honor an agreement under the deal to reopen the vital Strait of Hormuz shipping route. Tehran says Washington has reneged on its commitments, including lifting a blockade of Iranian ports and releasing frozen Iranian assets.
"One of the issues that is being discussed via mediators is the U.S. returning to the interim agreement and defining a time frame for implementing the commitments. There has been absolutely no progress on this issue," the Iranian source said.
Statements from Both Sides
Trump said on Wednesday that the U.S. has "total control" over the Strait of Hormuz.
But the Persian Gulf Strait Authority, the body Iran set up to manage the waterway, said it remains blocked and will not be reopened until Iran’s conditions are accepted.
"Iran is all talk and no action, the Bully of the Middle East No Longer," Trump said on his Truth Social platform.
Throughout the conflict, Trump has alternated between threats of escalation and claims that a peace deal is imminent.
No Talk of Extension
'NO TALK OF EXTENSION'
Casualties and Regional Impact
Thousands of people have been killed in the conflict, mainly in Iran and Lebanon, since the U.S. and Israel launched attacks on Iran on February 28.
Iran has struck U.S. assets and infrastructure in countries including Oman, Jordan, Kuwait, Israel, the United Arab Emirates and Saudi Arabia.
Ceasefire Agreement and Extension Rumors
The June interim ceasefire agreement set a 60-day period, extendable by mutual consent, within which Iran and the U.S. were expected to reach a final deal limiting Tehran's nuclear program and lifting U.S. sanctions.
The Iranian source dismissed a report on Wednesday from Turkey's Anadolu news agency that quoted Pakistani government sources as saying they had agreed to extend that 60-day period.
Iran's Position on Extension
"There is no talk of an extension because, from Iran’s perspective, there is no period that began and therefore nothing to extend. The United States violated the interim agreement 48 hours after it was reached and withdrew from it a few days later," the source told Reuters.
Attacks on Shipping and Oil Market Impact
ATTACKS ON SHIPPING
Strait of Hormuz and Global Oil Supply
The Strait of Hormuz, a narrow waterway between Iran and Oman and the entrance to the Gulf, handled a fifth of global oil and liquefied natural gas flow before the war.
Benchmark Brent crude futures have surged since the start of the war in February, hitting a peak of $126 a barrel, roughly 75% above pre-war levels, with choppy trade reflecting concerns over disruptions to Gulf oil supplies and shifting signals on peace talks.
Recent Incidents and Market Reactions
On Tuesday, in separate incidents, a suspected Houthi attack on a small cargo vessel killed four crew members in the Bab el-Mandeb Strait and a U.S. Navy MH-60 helicopter fired two Hellfire missiles to disable the steering gear of a Panama-flagged cargo ship, the U.S. military said.
Oil prices rose but then steadied in volatile trading on Wednesday, after forecasters cut projections for 2026 oil demand. Brent crude futures were trading at around $88 a barrel and U.S. West Texas Intermediate crude at around $83 a barrel.
(Reporting by Parisa Hafezi, Tala Ramadan and Elwely Elwelly; Writing by Alex Richardson and Simon Lewis; Editing by Andy Sullivan, Timothy Heritage, Philippa Fletcher and Deepa Babington)
