Oil prices rise as traders assess US-Iran talks on Strait of Hormuz deal

US President Donald Trump declared on Sunday that Iran's economy was in "a very bad shape" and that his administration would simply observe the mounting economic pressure while talks continue to open the Strait of Hormuz. This stance signaled the US decision to avoid further military strikes as Iran demands challenging conditions to open the strait. Axios reported Trump saying, "We are low-keying it. We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money."

The US president's calm demeanor contrasted with his previous threats, as he asserted, "It will work out. It always works out. It's like a chess game." Trump acknowledged that America's naval blockade has exacerbated Iran's economic crisis. Tehran has insisted on ending the blockade of Iranian ports and lifting oil sanctions before opening the waterway.

Despite Iran's latest demands leading to a further delay in opening the strait, Trump exhibited no signs of exasperation. The Strait of Hormuz, which controls one-fifth of the world's oil and natural gas, has been closed since February 28 after US and Israeli forces launched an attack on Iran. Trump explained that adopting the wait-and-watch policy was made simpler due to falling oil prices and reduced pain for American consumers from the ongoing war.

However, Iran denied engaging in direct negotiations with the US, stating they are communicating via intermediaries. Iran has demanded US compensation for its attacks and the lifting of all blockades and sanctions, as well as an end to aggression against Iran and its allies in Lebanon, Palestine, Yemen, and Iraq.