The prospects for peace in the Middle East suffered a fresh setback, with President Donald Trump saying he’s not interested in extending the expiring agreement with Iran and tensions flaring anew in the Strait of Hormuz.
Asked whether he would seek an extension of the memorandum of understanding signed in June — which technically expires Monday — Trump told reporters, “No.”
That truce was meant to give Washington and Tehran a window to reach a lasting peace deal within 60 days.
Brent crude climbed above $91 a barrel on Tuesday after trading at its highest since late July, while West Texas Intermediate was near $85, as prospects dimmed for a swift reopening of Hormuz, through which a fifth of the world’s oil and gas transited before the war.
A vessel heading out of the strait was struck by an unknown projectile, the UK Maritime Trade Operations reported Tuesday, highlighting the volatile situation in the waterway.
The attack resulted in one casualty and damaged the ship’s engine room, UKMTO said.
Two months after the pact’s signing at the Palace of Versailles outside of Paris, with Trump flanked by world leaders and business titans and celebrating renewed flows of oil, both sides have said the agreement is defunct.
Tensions over Hormuz have sparked flare-ups in hostilities, multiple fronts have created a tinderbox across the Middle East, and there’s been no movement on addressing Iran’s nuclear capabilities that remain Trump’s stated primary objective for striking the Islamic Republic from late February.
Still, Trump insisted on Monday that the US had leverage over Iran, citing the naval blockade of Iranian ports.
He repeated his idea of declaring the waterway an American territory, insisting the US retained total control — remarks directly at odds with Iranian officials who insist on managing flows through the strait.
Any renewed fighting would likely complicate efforts to revive the deadlocked negotiations between the US and Iran.
Trump has struggled to find an off-ramp to a war that’s increasingly unpopular in the US and threatens to penalise Republicans in November’s midterm elections.
Last week, Treasury Secretary Scott Bessent said the US is preparing to announce new economic measures on Tehran “like have never been seen.”
Oman is negotiating with Iran on how Hormuz should be managed, but the US isn’t part of those discussions.
In a phone interview earlier with Fox News, Trump warned that if “Oman gets in the way we’ll bomb the s—— out of them,” without giving any further details.
He made a similar threat in May. Oman isn’t a formal US military ally but has served as a close US security partner.
Iran said a “shipping map” has been finalised as part of a broader agreement for the governance of traffic in the strait, but intensive talks are continuing and a deal won’t necessarily translate into a reopening.
A deal has been elusive due to security complexities and the “obstructionist behaviour of destructive elements,” Iran’s Foreign Ministry spokesman Esmail Baghaei told reporters on Monday.
Tehran has said the US must remove its blockade.
Earlier on Fox News, Energy Secretary Chris Wright said the US military is “bringing out 8 or 9 million barrels of oil per day” from the region compared to “zero barrels of oil per day” in Iranian exports.
Trump told Fox News that back channels with officials from the Islamic Revolutionary Guard Corps remain open, something a spokesman later denied as a “delusion,” according to the state-run IRNA.
Tensions in the Middle East were already on the rise over the weekend, when Israel’s military said it killed senior Hezbollah commander Abu Hassan Alaa in southern Lebanon.
Eleven people died in the Israeli strikes on Saturday, which Prime Minister Benjamin Netanyahu said were in retaliation for an attack by the militant group that seriously injured three soldiers.
In recent days, Israel has also struck Iran-backed Hamas in Gaza, the Yemen-based Houthis have attacked ships in the Red Sea, and several vessels have been hit by projectiles in the Strait of Hormuz.
Israeli settlers have meanwhile laid siege to Palestinian homes, drawing international condemnation. Netanyahu has downplayed that violence and blamed a small number of radicals.
Meanwhile, Trump’s son-in-law and peace envoy Jared Kushner visited the Middle East this week to try and accelerate a US-brokered ceasefire in Gaza.
He, along with former UK Prime Minister Tony Blair and Nikolay Mladenov, the Board of Peace’s top envoy, were holding talks with Netanyahu in Jerusalem on Monday.
Kushner met Netanyahu a day after holding talks with Hamas’ leader in Egypt, assuring the prime minister that Israel’s military won’t be compelled to withdraw from Gaza until Hamas fully disarms, according to an official with knowledge of the talks.
Those conditions are likely to be rejected by Hamas, which has insisted that Israel withdraw from Gaza before it gives up its weapons.
The impasse underscores how challenging it will be to finalise a deal that Trump has widely touted as a “monumental step” toward a lasting peace in the region.
In a statement, Hamas called on mediators and the US-created Board of Peace overseeing the ceasefire to “compel” Israel to approve a road map setting out the next steps in the truce, the news agency said.
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