Iran Rejects US Ceasefire Bid as Strait of Hormuz Stays Shut
Iran refused a Trump-backed ceasefire proposal, citing Hormuz control demands, leaving energy markets on edge heading into the weekend.
Iran formally rejected a ceasefire proposal from the United States, reportedly relayed through Iraq, as the two countries remain deadlocked over the closure of the Strait of Hormuz. Tehran declared it would not accept a "temporary deal" and cited unresolved questions over control of the critical waterway as its core objection — a stance analysts see as a deliberate stalling tactic aimed at extracting further concessions from Washington.
The standoff carries an eerie familiarity. A similar cycle of public rejection and back-channel negotiation played out in May before both sides reached a ceasefire agreement in June, suggesting the current hard-line posturing may not represent either side's final word. Still, with the weekend approaching and no breakthrough in sight, market participants are bracing for continued volatility.
Read more Wall Street Revives 'Sell Chips, Buy Software' Trade in Volatile Week →
The economic fallout is already severe and accelerating. Ship traffic through the Strait of Hormuz has collapsed to roughly three vessel transits per day this week, according to data firm Kpler, down to single digits since July 20. LNG tanker crossings have been at zero since July 16. Dutch TTF natural gas futures have surged more than 40% since the end of June, hitting their highest level since March, while WTI crude oil has climbed over 30% this month, revisiting six-week highs above $90 per barrel.
The crisis risks spreading beyond the strait. Houthi forces have begun targeting vessels linked to Saudi Arabia or bound for the port of Jeddah, raising the specter of simultaneous disruption across both the Strait of Hormuz and the Red Sea. Global oil inventories, already drawn down in anticipation of a summer resolution, offer little cushion if the situation deteriorates further.
Continue reading at Forexlive.
