On Tuesday (August 4) in early Asian trading, US crude oil futures traded in a narrow range, currently hovering around $80.40 per barrel, temporarily halting an overnight drop of over 6%. US President Trump declared on Monday that the US and Iran were negotiating to end the five-month-long conflict, describing it as Tehran's "last chance" to sign a favorable agreement; however, Iran quickly denied any contact or talks between the two sides. These conflicting statements have cast a shadow over the prospects of a diplomatic resolution in the short term, and oil prices fell in response to the news.

Trump sends signals for negotiations and issues an "ultimatum".

Speaking to reporters in the Oval Office, Trump said that "negotiations are underway," adding that the talks were being held at the request of Iran, Saudi Arabia, the UAE, and Qatar. He warned, "This is their last chance to sign a good deal." He further revealed that the Strait of Hormuz could open "as early as tomorrow," and said that whatever the outcome of the negotiations, it would be "resolved quickly." He emphasized his two-step priorities: first, opening the strait, and second, pushing for the denuclearization of Iran, stating that he "want to give them one last chance before Iran is completely destroyed," a position he was "very proud of."

Iran explicitly denies: There were no negotiations, no arrangements.

However, Iran's stance is diametrically opposed to that of the United States. Iranian Foreign Ministry spokesman Baghae stated clearly on Monday morning that Iran is currently not engaged in any negotiations with the United States, nor has it arranged any meetings. He added that Iran has no plans to host foreign delegations or send negotiators abroad in the near future. Apart from Foreign Minister Araghchi, who is currently on a religious pilgrimage in Iraq, all negotiators are currently in the country, and Araghchi will be unable to participate in related work until at least the end of this week. A senior Iranian source confirmed that no talks are currently scheduled.

Threaten - Retreat - Threaten Again

Monday's developments continued Trump's pattern since the joint US-Israel "Operation Epic Fury" five months ago—repeatedly threatening major military action, only to cancel it under the pretext of diplomatic engagement. Trump had just canceled what he claimed was an approved plan for a "massive strike" against Iran over the weekend, instead claiming that negotiations would be held. However, since the breakdown of the June memorandum of understanding aimed at ending the conflict in early July, Iran has openly refused to engage in dialogue with Washington. Analysts point out that the US's escalating pressure often provokes stronger responses from Iran towards US troops stationed in the Middle East, regional allies, and international shipping, and each time the situation escalates, Trump ultimately chooses to back down.

Trump issued another statement in response, emphasizing control of the Strait.

In response to Iran's denials, Trump posted on Truth Social, accusing the Iranian leadership of "extreme hypocrisy" and claiming that Iran had actually requested a meeting and that further contact would take place "soon." He reiterated the U.S. Navy's complete control over the Strait of Hormuz and warned: "The American Great Wall of Steel! Nothing will get into Iran unless we want it to; nothing will get in unless there is a deal or total surrender." This tough stance creates a subtle tension with the White House's earlier statement that "negotiations are ongoing."

Market reaction: Oil prices fell immediately.

International oil prices fell significantly on Monday, influenced by Trump's remarks suspending military action and negotiations. Brent crude futures fell more than 7% to around $83.52 per barrel; WTI crude had previously plummeted more than 6% due to progress in US-Iran negotiations and expectations of geopolitical easing. The market remains on the sidelines, and if the US-Iran standoff continues in a cycle of "verbal sparring—denial—re-threats," oil price volatility may intensify further. (US crude oil futures daily chart, source: FX678) At 8:04 AM Beijing time on August 4, US crude oil futures were trading at $80.44 per barrel.