US President Donald Trump's decision to postpone the deadline for opening the Strait of Hormuz was partly aimed at calming energy and financial markets, Bloomberg reports, citing sources, writes UNN.
Details
Immediately before the opening of American markets on Monday, US President Donald Trump backed down from his threat to destroy Iran's energy infrastructure if it did not open the Strait of Hormuz within 48 hours — pushed by rising energy prices and the collapse of global markets caused by the US-Israeli war against Tehran, as well as the hope that new negotiations could lead to an agreement to end the conflict, the publication notes.
According to people familiar with the matter, "the president's decision was partly aimed at calming markets and immediately caused a sharp drop in Brent crude oil prices and a recovery in the S&P 500 index and US Treasury bonds."
This, as stated, "came after US allies privately warned Trump that his war was quickly turning into a disaster, while Gulf countries urged him not to destroy Iran's infrastructure, which would be crucial to preventing it from becoming a failed state after the conflict ends," people familiar with the matter said.
"Trump needed to somehow back away from a threat that would undoubtedly lead to a new round of escalation, this time crossing a new threshold by striking civilian energy infrastructure, which would likely be a war crime," said Dana Stroul, former Deputy Assistant Secretary of Defense for the Middle East. "Of course, it's no coincidence that the announcement of a five-day pause and negotiations came right before the markets opened in the United States on Monday morning."
Trump, speaking to reporters on Monday, said that Iranian officials had approached him to begin negotiations because they were eager to make a deal. On Sunday, in conversations between an unnamed Iranian official, his son-in-law Jared Kushner, and adviser Steve Witkoff, Tehran agreed to transfer nuclear material in the country and not restart its nuclear program, he added, stating that negotiations were expected to continue by phone on Monday. Iran denies any such talks.
"We'll see how it goes, and if it goes well, we'll eventually settle this issue," Trump said. "Otherwise, we'll just keep bombing the hell out of it."
The US president's decision to suspend plans for strikes on energy facilities was largely seen by people familiar with the ongoing diplomatic negotiations as an attempt to control oil prices, and Trump acknowledged this connection on Monday.
"The price of oil will drop like a rock as soon as a deal is made," Trump said. "I think that's already happening today. So we have a very serious chance of making a deal."
Iran immediately denied the idea that such negotiations had taken place and declared victory. "He backed down after hearing that our targets would be all power plants in West Asia," the semi-official Iranian news agency Fars reported, citing an anonymous Iranian source. Oil cut about half of its initial losses after the Fars report, with some traders skeptical of the accuracy of Trump's statement.
Trump's strong insistence that there were direct communications was met with caution by many US allies, who adopted a wait-and-see approach and remained skeptical of this latest outburst, given the US leader's numerous changes of position during the three-week conflict, the publication writes.
Trump acknowledged that negotiations had not been held with Ayatollah Mojtaba Khamenei, who was appointed supreme leader after his father, Ali Khamenei, died during the strikes. Trump stated that the US had not received direct messages from the new leader — and was not sure if he was still alive — but, based on intelligence, believed that Witkoff and Kushner were dealing with the true center of power in Iran.
Nevertheless, there is a risk that the pause could ultimately validate Iran's approach, especially if negotiations do not succeed, the publication notes.
"This risks confirming, in Tehran's view, that if it threatens in response, especially energy infrastructure in the region, it can force the US to back down," said Jonathan Panikoff, former Deputy National Intelligence Officer for the Middle East at the US National Intelligence Council. "In their view, Iran is not only winning, but such actions strengthen its own deterrence."
Meanwhile, according to Fatih Birol, head of the International Energy Agency, more than 40 energy facilities in nine Middle Eastern countries have been "seriously or very severely" damaged by the war, potentially prolonging disruptions to global supply chains after the conflict ends. Due to the damage, it will take some time for oil fields, refineries, and pipelines to resume operations, Birol said on Monday.
At the same time, Trump did not say whether he would refrain from striking military targets in the country during the five-day break. Israel does not see an imminent end to the war and plans to continue operations, avoiding energy assets, according to an Israeli official.
Israel was informed in advance of Trump's social media post, two officials said, and its army stated that it was striking the center of the Iranian capital, Tehran, within an hour of the announcement. Therefore, it is unclear whether this decision is the beginning of a process to end the war, the publication writes. An Israeli army spokesman said that the war had not been suspended and fighting was continuing.
Trump, for his part, acknowledged that he had spoken with the Israelis about the negotiations, but predicted that they would agree to a final deal.
"I think Israel will be very happy with what we have," Trump said. "We just spoke with Israel. I think they will be very happy. This will be peace for Israel — long-term peace, guaranteed peace, if it happens."
Various Middle Eastern countries, including Turkey, Saudi Arabia, and Oman, have been holding informal talks with Iran for the past two weeks, trying to contain the war and, ideally, achieve a ceasefire agreement between the Islamic Republic and the US-Israeli coalition.
"This is great for other Middle Eastern countries, Saudi Arabia, UAE, Qatar, especially Kuwait and Bahrain," Trump said of his efforts.
According to a senior diplomat working in the region, in the days leading up to Trump's statement, the most active informal channels of communication with Iran were those organized by Turkey and Oman, and, according to another, messages were transmitted through Riyadh, New Delhi, and Cairo. However, it is unclear what impact these discussions had on Trump's decision.
At the same time, officials from a number of Gulf countries, who had tried their best to stay out of the war, hardened their stance on Iran after weeks of bombing by Tehran. According to sources familiar with the situation, Saudi Arabia told the US that it was ready to strike Iran if the Islamic Republic tried to attack its own power plants and water treatment facilities.
The United Arab Emirates was one of the most active opponents of the war: many officials said they would defend themselves against Iranian aggression, and a senior adviser to the Emirati president said that Iran had brought them closer to Israel and the US.
Trump's decision illustrated his inconsistent approach to the war. It came after three days during which he sent thousands of Marines to the region and spoke of potential group operations; floated the idea that the war was "coming to an end"; suggested he would leave it to others to open the strait; and then issued a 48-hour ultimatum, the publication writes.
Addition
Earlier today, Trump reported that "the United States of America and Iran have had very good and productive talks over the last two days regarding a full and comprehensive settlement of our military actions in the Middle East," and that he had instructed the Pentagon to postpone strikes on Iranian power plants and energy infrastructure for 5 days.
Iranian media then denied the fact of negotiations. The Iranian publication Mizan stated that "Trump's comments are an attempt to lower energy prices."
Reuters noted that oil prices fell by more than 13% after Trump postponed military strikes on Iran's energy infrastructure.