Iran warns it won't let US decide war timing as oil drops 7%

Tehran is leveraging Oman-mediated talks to reclaim control over the Strait of Hormuz while rejecting any US role in determining the conflict's trajectory.

Iran told the US it will not dictate when the five-month-old war starts or ends, even as a three-day pause in hostilities sent Brent crude sliding 6.8% to $85.49 a barrel and global equities rallying.

"We currently have no negotiations with the United States," Foreign Ministry spokesperson Esmail Baghaei told reporters in Tehran Monday, adding that talks with Oman focused on "establishing mechanisms regarding maritime traffic" through the Strait of Hormuz. "Iran will not allow the US to determine the time of war and peace," Baghaei said, according to the semi-official Tasnim News Agency.

The diplomatic opening followed 13 consecutive days of US strikes on Iranian coastal infrastructure and Iran's retaliatory attacks on US bases in Jordan and Iraq, which killed four American service members. Markets responded sharply to the pause: WTI crude fell 7% to $83.06, the S&P 500 futures gained 1%, and Germany's DAX rose 1.6%. The relief was tempered by Iran's Revolutionary Guard turning back six vessels attempting to transit the Strait of Hormuz with warning shots Monday, underscoring that the waterway handling about 21% of global oil trade remains effectively closed.

The 60-day interim ceasefire deal signed in mid-June is now well into its second half, with core issues — notably Iran's nuclear program — still unresolved. US Ambassador to the UN Mike Waltz said the pause aims at "giving diplomacy some space" but stressed additional US military assets "are moving into the region." The question for markets is whether the lull becomes a ceasefire or merely a tactical breather before a wider escalation.

Oman's Mediation Role Expands as Qatar and Pakistan Join

Oman has emerged as the critical intermediary, hosting talks with Iranian officials Friday and Saturday that an Iranian source described as "constructive" and moving in a "positive direction." Two regional officials told the Associated Press that mediators led by Qatar and Pakistan were working to bridge gaps between Washington and Tehran to revive the interim deal that recent exchanges of fire had largely undermined.

Baghaei confirmed that technical and political consultations with Oman are continuing but insisted the Strait of Hormuz remains closed. The US military said Saturday its reimposed naval blockade continued, with a dozen commercial ships redirected, two disabled and two boarded. CENTCOM said it "remains highly vigilant, focused, lethal, and ready."

The last time Iran asserted unilateral control over the strait in late February, the US and Israel launched Operation Epic Fury, triggering the current conflict. Since then, more than 400 US service members have been flown out of the region for treatment, though most cases were not combat-related, a US official told CBS News.

Risks of a Wider Regional Fire

The fragility of the pause was on display Monday as Saudi Arabia intercepted multiple drones launched from Iraq targeting its petroleum facilities. Major General Turki Al-Maliki blamed "terrorist militias affiliated with Iran" and stressed the kingdom's right to respond. Jordan's armed forces separately shot down two drones that breached its airspace from Iranian territory, while Israel intercepted two unmanned aircraft near the Jordan border.

In Yemen, Iran-backed Houthi rebels continued their blockade of Saudi ports in the Red Sea, with shipping through the Bab el-Mandeb Strait falling to its lowest level in months Sunday, according to Kpler. Only 11 commodity ships transited the passage that day.

Ukraine Complicates the Picture

The geopolitical landscape grew more complex after Ukraine struck an Iranian commercial vessel in the Caspian Sea Saturday, killing one sailor. President Volodymyr Zelenskyy said the target was "cargo ships used in military cargo shipments involving Iran and Russia." Iranian Foreign Minister Abbas Araghchi called the attack a "blatant UN Charter violation" and warned it "cannot go unanswered."

Zelenskyy, who is expected to visit Washington this week, warned that Russia has been sharing satellite imagery of Gulf states and US military facilities with Iran — a claim that, if confirmed, would add a new dimension to the conflict.

What Comes Next

Israeli Prime Minister Benjamin Netanyahu travels to Washington Tuesday to meet with President Trump, with Iran at the top of the agenda. Netanyahu said he would "listen to what he has in mind, because I think in many ways, it's his decision."

For oil markets, the trajectory hinges on whether the Oman-mediated talks produce a tangible mechanism for reopening the Strait of Hormuz. Brent crude at $85.49 still reflects a significant risk premium — before the war, it traded below $70. A breakdown in diplomacy could send prices back above $90, while a durable ceasefire could accelerate the selloff.

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