In a potential diplomatic breakthrough, negotiators from the United States and Iran might reconvene in Islamabad this week to resume discussions aimed at ending the ongoing conflict. This development comes on the heels of unsuccessful talks over the weekend, which led the United States to impose a blockade on Iranian ports, according to sources cited by Reuters on Tuesday.

The American blockade, unsurprisingly, elicited a strong response from Tehran. However, the possibility of renewed diplomatic engagement appeared to stabilize oil markets, resulting in a dip of benchmark prices below the $100 mark on Tuesday.

The recent high-level discussions, the most significant since the 1979 Islamic Revolution, concluded in Pakistan’s capital without any significant progress, casting doubt on the viability of a two-week ceasefire that is set to expire in a week.

Despite the lack of an immediate breakthrough, insiders involved in the negotiations revealed on Tuesday that both nations might be back at the table by the end of this week. A proposal has been circulated to Washington and Tehran, inviting them to send their delegations once more.

“There is no confirmed date yet, but the delegations are keeping their schedules open from Friday to Sunday,” noted a senior Iranian source.

Meanwhile, U.S. President Donald Trump disclosed that Iran had reached out on Monday with an interest in negotiating a deal. He emphasized, however, that any agreement would strictly prohibit Tehran from acquiring a nuclear weapon.

Since the United States and Israel began the war on February 28, Iran effectively shut the Strait ​of Hormuz to all vessels except its own, saying passage would be permitted only under Iranian control and subject to a fee. The fallout has been widespread, as nearly a fifth of the ​world’s oil and gas previously flowed through the narrow waterway.

In a countermeasure, the US military began blocking shipping traffic in and out of Iran’s ports on Monday. Tehran has threatened to hit naval ships going through the strait and to retaliate against its Gulf neighbours’ ports.

OIL SUPPLY FORECASTS CUT

The US blockade has further clouded the outlook for global energy security and the supply of a vast array of goods that rely on petroleum.

The United States’ NATO allies ​including Britain and France said they would not be drawn into the conflict by taking part in the blockade, stressing instead the need to reopen the waterway.

Reflecting the growing disruption, the International Energy ​Agency on Tuesday sharply cut its forecasts for global oil supply and demand growth, saying both are now expected to fall from 2025 levels as war in the Middle East disrupts oil flows and weighs on ‌the global ⁠economy.

NUCLEAR DEMANDS REMAIN FIRM

US Vice President JD Vance, who led Washington’s delegation opposite Iran’s speaker of parliament, Mohammad Baqer Qalibaf, told Fox News on Monday the US had “made a lot of progress” by communicating to Tehran where Washington “could make some accommodation” and where it would remain inflexible.

He said Trump was adamant that any enriched nuclear material must be removed from Iran and a mechanism must be established to verify that Iran is not developing nuclear weapons.

Tehran “moved in our direction, which is why I think we would say that we had some good signs, but they didn’t move far enough,” Vance said, ​without disclosing further details.

CEASEFIRE STILL HOLDING

With the war ​unpopular at home and rising energy prices ⁠causing political blowback, Trump paused the US-Israeli bombing campaign last week after threatening to destroy Iran’s “whole civilization” unless it reopened the strait.

The ceasefire, which halted US-Israeli strikes and fire from Iran across the Gulf in response, has largely held over its first week despite sharp rhetoric from both sides.

An Iranian ​military spokesperson called any US restrictions on international shipping “piracy,” warning that if Iranian ports were threatened, no port in the Gulf or Gulf ​of Oman would be secure. ⁠Any military vessels approaching the strait would violate the ceasefire, Iran’s Revolutionary Guards said.

Trump said Iran’s navy had been “completely obliterated” during the war, adding that only a small number of “fast-attack ships” remained.

“Warning: If any of these ships come anywhere close to our BLOCKADE, they will be immediately ELIMINATED,” Trump wrote on social media.

The US military’s Central Command said the blockade would be enforced against vessels entering or leaving Iranian ⁠ports in the ​Gulf and Gulf of Oman. It would not impede neutral transit passage through the Strait of Hormuz to or ​from non-Iranian destinations, it said in a note to seafarers seen by Reuters.

Three Iran-linked tankers were seen transiting the Strait of Hormuz on the first full day of the US blockade on Tuesday, shipping data showed. As the vessels were not heading ​to or from Iranian ports, they were not covered by the blockade.