Hopes for easing tensions in the Middle East strengthened on Tuesday after US President Donald Trump said his administration held "very good discussions" with Iran during day-long negotiations, raising expectations that a deal to reopen the Strait of Hormuz could be reached soon.
The diplomatic optimism lifted global financial markets, with oil prices falling and Asian stocks rising after Wall Street reached record highs on expectations that maritime traffic through the strategically important waterway could soon resume.
Speaking to Fox News' "@ Night" program, President Donald Trump said US and Iranian officials had engaged in all-day negotiations and described the discussions as positive.
"They had an all-day negotiation," Trump said.
"We are having very good discussions," he added.
Trump also expressed confidence that the Strait of Hormuz would reopen soon but warned Iran against withdrawing from the negotiations.
"The Strait of Hormuz is going to be open very soon," he said. "If they back out again, they are going to get hit really hard."
Throughout the five-month conflict, Trump has repeatedly alternated between threatening large-scale military action against Iran and expressing optimism that diplomacy could resolve the crisis.
Markets respond to hopes of breakthrough
Investor confidence improved following Trump's remarks.
Oil prices declined while stock markets across Asia advanced after Wall Street closed at record highs, reflecting expectations that a diplomatic agreement could restore shipping through the Strait of Hormuz and stabilize global energy supplies.
The waterway normally carries around one-fifth of the world's oil and liquefied natural gas shipments, making any disruption a major concern for international markets.
Interim Strait of Hormuz deal reportedly close
According to Axios, citing two regional sources and a US official, Washington and Tehran are moving closer to an interim agreement to reopen the Strait of Hormuz with the support of Oman, which oversees part of the strategic waterway.
Also Read: Iran agrees to reopen Strait of Hormuz under regional supervision
The report said the United States hopes an agreement could be announced on Wednesday.
However, Iranian state media, quoting an informed source, reported that any agreement with Oman would remain delayed as long as the United States continues issuing military threats against Iran.
Qatar and Oman continue mediation efforts
Qatar also reported progress in mediation efforts aimed at ending the conflict despite Tehran publicly denying that negotiations with Washington are taking place.
According to Qatar's Emiri Office, President Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts during a telephone conversation to narrow differences between Washington and Tehran and improve prospects for a lasting settlement.
Meanwhile, Iranian Foreign Ministry spokesperson Esmaeil Baghaei described discussions with Oman over transit through the Strait of Hormuz as positive and ongoing.
According to Iranian state media, Baghaei said the talks are focused on establishing secure shipping lanes that protect the sovereign rights and national security interests of both Iran and Oman.
Also Read: US has used 'virtually all' of long-range missiles on Iran: Sources
Iran has long argued that it should share control of the Strait of Hormuz with Oman, which lies on the opposite side of the strategic passage.
However, Tehran rejected an Omani proposal last week that would have introduced joint oversight of the Strait while allowing voluntary security fees to be collected from commercial vessels.
Iran has largely halted traffic through the Strait of Hormuz, while Washington continues to enforce a blockade targeting Iran-related shipping and ports.
Trump's broader objectives remain unmet
Despite the apparent diplomatic momentum, Trump has yet to achieve the key objectives his administration outlined at the beginning of the conflict.
Those goals include dismantling Iran's nuclear programme, reducing Tehran's military capabilities against regional rivals and creating conditions for political change inside Iran.
The current conflict began on February 28 after the United States and Israel launched military strikes against Iran, prompting Tehran to retaliate with attacks targeting Israel and Gulf countries hosting US military bases.
The wider maritime security situation remains volatile.
Yemen's Iran-aligned Houthi movement has imposed a naval blockade on Saudi Arabia in the Red Sea, further limiting regional energy export routes.
Also Read: Iran president says Tehran seeks no escalation in regional tensions
In the latest incident, an Indian-flagged vessel was struck by a projectile near Yemen, causing it to capsize and sink. Indian authorities confirmed that all 14 crew members were successfully rescued, while Yemen blamed the Houthis for the attack.
The United Nations' International Maritime Organization reports that at least 17 seafarers have been killed in 64 separate incidents in the Strait of Hormuz since the conflict began on February 28.
Human cost of the conflict
The conflict has caused heavy casualties on both sides.
Iran previously reported that renewed US strikes since late June killed 50 people and wounded around 500 others. Tehran later said a US strike on Qeshm Island in late July killed a husband, wife and their two-year-old child.
Overall, Iran says more than 3,400 people have been killed since the United States and Israel launched military operations on February 28.
Also Read: Trump accuses Iranian leadership of 'double standards'
The United States has reported the deaths of 18 military personnel during the conflict.
US-Israeli strikes inside Iran and Israeli military operations in Lebanon have also resulted in thousands of deaths and the displacement of millions of people across the region.
Trump's threats draw legal criticism
Trump's repeated warnings of military escalation have attracted criticism from international legal experts and human rights advocates.
During the conflict, the US president threatened attacks on Iranian civilian infrastructure and earlier warned that Iran's civilization could be destroyed if diplomacy failed.
Iran responded by warning that any such attacks would prompt retaliatory strikes against regional energy and economic facilities.
Legal experts noted that the 1949 Geneva Conventions prohibit attacks on infrastructure considered essential for civilian populations, adding that deliberate strikes against such facilities could constitute war crimes under international humanitarian law.
