US and Iran Near Hormuz Agreement Despite Diplomatic Deadlock: Pakistan

Washington and Tehran are nearing an agreement concerning the Strait of Hormuz, according to Pakistan's defense minister, despite a recent escalation in diplomatic posturing from both capitals.

Khawaja Asif informed reporters in Islamabad on Tuesday that the deadlocked negotiations are showing signs of progress.

“Things are shaping up in favor of peace,” the defense minister stated, though he withheld specifics regarding any diplomatic breakthrough.

Mediation efforts led by Pakistan and Qatar continue to navigate a maze of conflicting signals over the critical maritime corridor.

Discussions between Oman and Iran to resume limited shipping operations through the strait have already reached an advanced phase, according to a Qatari Foreign Ministry spokesperson cited by Al Jazeera.

Shifting Demands

Progress on the diplomatic front contrasts sharply with hardening public rhetoric.

U.S. President Donald Trump indicated on Monday that Tehran must pay reparations for casualties linked to Iranian operations and internal crackdowns.

Trump's demand followed weekend stipulations from Tehran, which sought compensation for alleged U.S. violations of an interim peace accord established in June.

Iran is expected to dismiss the American financial claims outright.

In a weekend exchange with Axios, the U.S. president signaled a preference for economic coercion over renewed military action.

"We are low-keying it," Trump noted, emphasizing his intent to maintain pressure rather than initiate fresh strikes to reopen the waterway.

Economic Fallout

The broader geopolitical standoff has devastated the Iranian economy. A strict U.S. naval blockade has severely restricted crude exports and crippled industrial capacity.

Official central bank figures place year-on-year inflation at 77 percent. The national currency has shed more than 10 percent of its value compared to prewar levels, compounding the financial strain on the population.

This currency depreciation triggered severe nationwide protests earlier this year.

A subsequent government crackdown resulted in thousands of fatalities, though anti-government demonstrations have not recently resurfaced.

Tehran has conditioned the full reopening of Hormuz on the removal of the U.S. blockade, the unfreezing of assets, and war reparations.

Iranian officials also demand a permanent halt to strikes against aligned militant factions across Lebanon, Iraq, Yemen, and Gaza.

Energy Markets React

Oil markets immediately responded to the prospect of a diplomatic resolution, with Brent crude erasing earlier gains to trade near $87.50 a barrel in London.

Prior to the outbreak of hostilities on Feb. 28, the Strait of Hormuz facilitated approximately 20 percent of global oil and liquefied natural gas shipments. Its continued closure has heavily disrupted international trade.

Freight rates have skyrocketed during the blockade. Securing a supertanker for the benchmark Middle East-to-China route now costs nearly $500,000 per day, more than doubling prewar figures.

Simultaneously, European diesel futures spiked over 10 percent following drone strikes on refineries in Russia and Libya.

In Saudi Arabia, authorities extinguished a Sunday fire at the Jazan oil refinery, an incident claimed hours later by Yemeni Houthi militants.

Regional Instability

The lack of a formal resolution continues to generate maritime risks. “The region cannot remain indefinitely in a state of neither war nor peace,” Anwar Gargash, a senior diplomatic adviser to the U.A.E. president, posted on X.

The British navy reported an unspecified incident Tuesday involving military forces and a container ship in the Gulf of Oman.

A separate event off the Yemeni coast in the Red Sea resulted in casualties after an unknown projectile struck a cargo vessel.

Maritime security firm Vanguard Tech confirmed a Panama-flagged container ship lost command capabilities after a missile strike near the U.S. blockade line.

The origin of the attack remains unidentified.