US and Iran to resume talks next week as ceasefire crumbles

The US and Iran are expected to hold a new round of negotiations next week, possibly in Switzerland, according to a person familiar with the matter, as mediators scramble to salvage a ceasefire that collapsed this week after both sides exchanged fresh strikes across the Middle East.

"The United States is still committed to finding a resolution, and technical talks continue," a US official told CNN. "Iran can never possess a nuclear weapon." The official said the memorandum of understanding signed in mid-June was "performance-based," and that Iran's actions — including the Strait of Hormuz not being fully reopened and strikes on ships during the NATO Summit — "constitute failed performance at an unacceptable level."

The back-and-forth attacks this week marked the most serious breach of the interim deal since it was signed. The US military said it hit 90 targets along Iran's coastline overnight Wednesday, while Iran's Revolutionary Guards said they fired 10 ballistic missiles at a US military base in northern Jordan and targeted US facilities in Bahrain, Kuwait and Qatar. At least 14 people were killed and 78 wounded in Iran over two days of American airstrikes, according to Iran's Health Ministry. In Kuwait, falling debris wounded one person as the nation intercepted three ballistic missiles, a cruise missile and 10 drones.

The collapse of the ceasefire has dealt a blow to energy markets. Traffic through the Strait of Hormuz — which handles about a fifth of the world's traded oil and natural gas — plunged to just 13 commercial vessels in the past 24 hours, down from about 110 ships a day before the war began in late February. Maritime data from Lloyd's List Intelligence showed 576 ships transited the strait in June, up from 233 in May during the worst of the blockade, but still far below the 3,100 that passed through in June 2025. GPS spoofing around the waterway has also resumed after easing during negotiations.

Pakistan and Qatar, the key mediators who helped broker the original memorandum of understanding in Switzerland, are working to bring both sides back to the negotiating table, regional sources told CNN. Oman, which facilitated earlier rounds of talks, is also involved. Pakistan's Ministry of Foreign Affairs called on all parties to "refrain from any actions that may further undermine regional peace and stability" and urged them to uphold commitments under what it called the Islamabad Memorandum of Understanding.

The diplomatic push comes as Iran concluded days of funeral ceremonies for slain Supreme Leader Ayatollah Ali Khamenei, who was buried Thursday at the Imam Reza shrine in Mashhad. His son and successor, Mojtaba Khamenei, made no public appearance during the proceedings — absent even from the private burial — after the Islamic Revolutionary Guard Corps advised against it, a regional source told CNN. The absence has fueled speculation about his capacity to lead at a precarious moment for the Islamic Republic, with opponents claiming injuries sustained in the strikes that killed his father have left him incapacitated.

The last time US-Iran negotiations broke down so publicly was in April, when a previous round of strikes derailed talks for several weeks before Pakistan and Qatar brokered a return to the table. During that period, Brent crude spiked more than 12 percent and the Strait of Hormuz saw traffic fall to below 200 ships per month. The current escalation follows a similar pattern but carries additional complexity: Iran's leadership transition, an alleged plot on President Donald Trump's life that Israel shared intelligence on this week, and Trump's declaration at the NATO summit that the MOU "is over."

Negotiations to reach a final deal — covering full reopening of the strait and rolling back Iran's nuclear program — were originally scheduled to begin after Khamenei's funeral. Whether next week's talks can restore even the interim ceasefire remains uncertain. Iran's Parliament Speaker Mohammad Bagher Qalibaf, a key negotiator, struck a defiant tone: "America still hasn't learned that bullying and breaking promises are no longer cost-free. If you strike, you'll get hit."

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