The proposed ceasefire will probably fail, as the US and Iran disagreed to agree on ending their war despite 21 long hours of negotiations aimed at stopping a conflict that has killed thousands and sent global oil prices soaring since it began over six weeks ago.
The US Vice President, JD Vance, led the delegation that carried out the peace talks in Pakistan’s capital, Islamabad. According to what he told reporters shortly before he left Islamabad, the inability to reach an agreement is more bad news for Iran than for the United States.
Both countries' delegation have left Islamabad and return to their home country. While the US cities 'RED LINES', Iran says US's demand is too 'EXCESSIVE'. JD Vance said Iran had chosen not to accept the core goal of the President of the United States; that they should not seek the tools that would enable them to quickly develop a nuclear weapon.
Tasnim News Agency, a semi-official outlet closely linked to the Iranian government, made it clear that “excessive” US demands were the main reason the peace talks collapsed. Other reputable Iranian news outlets also reported that both sides made progress on a number of issues, but that the Strait of Hormuz and Iran’s nuclear programme remained the main points of disagreement.
The peace talks were arranged after both countries agreed to a two-week ceasefire to create time for negotiations. The peace talks were also among the first high-level direct US–Iranian meetings in more than a decade, and the most significant discussions since the 1979 Islamic Revolution.
The Strait of Hormuz Negotiations
Iran is demanding control of the Strait of Hormuz and collection of transit fees in the Strait. But as a minimum, Trump wants free passage for global shipping through the strait. They want ships to coordinate passage with Iranian authorities, describing it as “per-voyage” or “per-barrel” charges.
However, shipping data showed that three fully loaded crude oil supertankers passed through the Strait of Hormuz on Saturday while the peace talks were ongoing in Islamabad. According to Reuters, these ships were the first vessels to exit the Gulf since the ceasefire agreement.
Meanwhile, hundreds of oil tankers remain in the Gulf, waiting and hoping for clearance to leave the Strait during the two-week ceasefire window. It is important to note that despite the fact that the two-week ceasefire is still ongoing, their departure now depends on several factors and conditions, as no agreement has been reached by both sides.
The Nuclear Weapon Negotiations
Iran is also demanding payment of war reparations, a ceasefire across the region including Lebanon, and permission to continue its nuclear programme. Despite the fact that Trump’s stated goals have shifted, his bare minimum requirement is the crippling of Iran’s nuclear enrichment programme to ensure it cannot produce an atomic bomb.
Notably, Israel has been bombing Hezbollah militants, a powerful political and military organization based in Lebanon. The armed members of Hezbollah is backed by Tehran and Iran is demanding that the fighting in Lebanon has to stop. But Israel is saying that conflict is not part of the Iran-U.S. ceasefire.
The Israeli military said it struck Hezbollah rocket launchers overnight between Saturday and Sunday, while black smoke was seen rising from Beirut’s southern suburbs on Sunday. Meanwhile, air raid sirens sounded in Israeli border villages, warning of incoming rocket fire from Lebanon.
The Frozen Assets Negotiations
Iran is also demanding for the release of all assets that were seized abroad. Before the peace talks begin, an insider in the Iranian government said that the US had agreed to release frozen assets in Qatar and other foreign banks. But a US official has denied this allegations.
Iran has large financial assets held in foreign countries that are restricted (frozen) due to sanctions. The sanctions are mainly imposed by the United States and supported by other financial systems. Around $100 to $120 billion Iranian assets are frozen globally, which many are blocked in foreign banks, restricted oil revenues, and escrow accounts under sanctions rules.
The assets are spread across several countries' central bank reserves including, South Korea—which holds billions of dollars in oil revenue, Iraq—which holds energy trade payments, China—which holds large reserves tied to oil exports, Japan, Luxembourg and Europe—which hold bank-held funds under sanctions, and the United States—which holds a smaller portion (~$2 billion in direct US jurisdiction).
US sanctions after the 1979 Iranian Revolution, nuclear-related sanctions in later decades, and restrictions on banking transactions involving Iran’s central bank are the major causes of the frozen assets. These sanctions have long been blocking Iran from transferring money abroad, using foreign reserves, and accessing oil sale revenue in many cases.
