On Wednesday (August 12), unsettling signals simultaneously emerged from diplomatic channels in Dubai and Washington—negotiations between Iran and the United States aimed at permanently ending the Gulf War not only failed to make any substantial progress but also escalated into a deeper stalemate due to mutual accusations of reneging on commitments. Just two months earlier, the international community had placed high hopes on a provisional agreement declaring an "immediate and permanent cessation of military operations on all fronts," but this fragile ceasefire arrangement vanished like a mirage in the desert. Now, the Strait of Hormuz remains firmly blocked by Iran, attacks on merchant ships resumed on Tuesday, directly triggering severe turmoil in global energy markets, and the renewed verbal exchange between US President Trump and the Iranian leadership has further dimmed the already bleak prospects for peace.

The agreement was short-lived: the 60-day ceasefire proved to be a flash in the pan.

The temporary ceasefire agreement reached in mid-June was originally designed as a 60-day transitional arrangement, allowing both sides to negotiate an extension while also reserving sufficient time to finalize a treaty binding Iran's nuclear program and lifting comprehensive US sanctions. However, this document, seen as a "breakthrough," has been virtually ineffective in practice. According to a senior Iranian source, the US showed signs of violation less than 48 hours after the agreement was signed, and a few days later, it effectively withdrew its overall endorsement. President Trump publicly declared on social media on July 7 that the agreement was "over," and the Iranian Foreign Ministry officially responded a week later, announcing the "suspension of implementation" of the agreement. Thus, this temporary arrangement, which carried the hope of a ceasefire, has become defunct before it could truly serve as a buffer.

Conflicting Accounts: Dispute Over Breach of Contract Allegations and Performance Schedule

The core of the current dispute lies in their drastically different interpretations of the agreement's terms. Washington insists that Iran has failed to fulfill its crucial commitment to reopening the Strait of Hormuz, a vital global energy chokepoint, a commitment that was a key precondition for the US to agree to a ceasefire. In response, Tehran lists several US breaches of the agreement, including failing to lift the military blockade of Iranian ports as agreed, failing to unfreeze frozen Iranian overseas assets as scheduled, and maintaining certain financial sanctions. Iranian sources have explicitly stated that one of the issues currently being discussed through third-party mediation is demanding that the US return to the framework of the interim agreement and submit a clear timetable for implementation; however, on this issue, "there has been no progress to date." This stalemate over "who should fulfill their obligations first" has rendered any technical negotiations futile.

Strait Standoff: The Struggle Between Blockade and "Complete Control"

The Strait of Hormuz—a narrow and strategically vital waterway between Iran and Oman—previously carried about one-fifth of the world's oil and liquefied natural gas transport; now it has become the front line of their military standoff. Although Trump claimed on Wednesday that the US had "complete control" over the strait, the Persian Gulf Straits Authority, which manages the waterway, immediately refuted this claim, emphasizing that the strait remains completely blocked and making it clear that the waterway will not be reopened until Iran's conditions are met. The actual situation confirms Iran's position: two separate maritime attacks occurred on Tuesday, one involving Houthi attacks on a small cargo ship in the Babu-el-Mandab Strait that killed four crew members, and the other nearly escalating into a larger conflict when a US Navy helicopter fired two Hellfire missiles, damaging the steering gear of a Panamanian-flagged cargo ship. These military frictions not only exposed the risk of direct confrontation at sea but also fueled growing fears of supply disruptions in the energy market.

Verbal Clash: From "Bully" to "All Talk and No Action"

Throughout the conflict, President Trump's public statements have exhibited unpredictable oscillations—at times threatening a more aggressive military escalation, at other times hinting that a peace agreement is "just around the corner." This Wednesday, he again posted on Truth Social, sharply criticizing Iran for "all talk and no action" and mocking it for no longer deserving the title of "Middle Eastern bully." This highly personal attack contrasts sharply with Iran's repeated emphasis through official channels and media of "America's lack of sincerity." Iranian sources specifically clarified that previous reports by Turkey's Anadolu Agency, citing Pakistani government officials, that both sides had agreed to a 60-day extension were completely false; from Iran's perspective, since the original agreement was never truly implemented, there is naturally no question of any form of extension. This statement effectively closes the diplomatic backdoor of simply extending the ceasefire to buy time in the short term.

Market volatility: squeezed by both high oil prices and weak demand

Since the US-Israel military strikes against Iran on February 28, the conflict, which has affected US facilities in Iran, Lebanon, and several Gulf states, has resulted in thousands of deaths and severely disrupted regional supply chains. Brent crude futures surged to a high of $126 per barrel at the height of the conflict, a rise of approximately 75% from pre-war levels. While subsequent fluctuations due to conflicting news regarding negotiations have been significant, prices have remained around $88 per barrel. Tuesday's shipping attacks triggered another intraday surge, but prices ultimately stabilized on Wednesday amidst volatile trading as several forecasting agencies lowered their 2026 global oil demand forecasts. This tug-of-war between "geopolitical risk premiums" and "expectations of shrinking demand" reflects the market's deep uncertainty about the future of the Gulf situation—investors worry about a supply cliff caused by a strait blockade, and also fear that a global economic slowdown will weaken consumption. The unpredictable nature of the peace process makes any directional bet extremely difficult. Amid the tug-of-war between bulls and bears, Brent crude oil is expected to fluctuate wildly within the $85 to $90 per barrel range. If the lockdown continues for an extended period, there is a possibility that oil prices could break through the $100 mark again.

In conclusion: The divide remains insurmountable, and peace remains shrouded in mist.

From the brief glimmer of hope in June to the renewed standoff in August, the trust deficit between the US and Iran has not narrowed but rather widened with each attack and each round of mutual accusations. Iran insists that the US fulfill its obligations first and provide a clear timetable, while the US sees Iran's blockade as a direct violation of the agreement. The two sides are fundamentally at odds on basic facts, let alone engaging in substantive consultations on deeper issues such as nuclear program restrictions and sanctions lifting. The blockade of the Strait of Hormuz is unlikely to be lifted in the short term, the risk of military friction remains high, and the scope for international mediation is extremely limited. Given the lack of willingness to compromise on both sides and the escalating domestic political pressure, this Gulf crisis is likely still a long way from its true end.

Frequently Asked Questions

Question 1: Why did the temporary ceasefire agreement reached in June of this year collapse in such a short time? Answer: The fundamental reason for the collapse of the agreement lies in the fundamental differences between the two sides regarding the order of implementation and the content of the terms. The United States believed that Iran's failure to immediately reopen the Strait of Hormuz after the signing of the agreement constituted a violation of its core obligations; while Iran claimed that the United States violated its promises to lift the port blockade and unfreeze assets within 48 hours, and effectively withdrew from the agreement in the following days. Due to the lack of effective monitoring and dispute resolution mechanisms, even minor breaches by either side could quickly trigger reciprocal countermeasures, ultimately leading to a complete breakdown of trust. Furthermore, President Trump's casual attitude towards diplomatic commitments—first declaring the agreement "over," then claiming peace was "coming soon"—greatly undermined the credibility of US commitments, making Iran more inclined to take a hardline stance. Question 2: Why is the Strait of Hormuz so crucial to the global economy and this conflict? Answer: The Strait of Hormuz is the only waterway connecting the Persian Gulf and the Indian Ocean; before the war, approximately one-fifth of the world's oil and liquefied natural gas transported passed through it. The exports of major oil-producing countries such as Saudi Arabia, the UAE, Kuwait, and Qatar almost entirely depend on this passage. If the blockade continues, not only will the energy revenues of Gulf countries be directly damaged, but it will also trigger a surge in global oil prices and inflationary pressures, further impacting manufacturing, transportation, and consumer spending in these countries. Therefore, controlling the strait is tantamount to holding strategic leverage that influences the lifeline of the world economy. Iran is using this geographical advantage, employing the blockade as a core bargaining chip to force concessions from the United States; while the United States views freedom of navigation in the strait as an inviolable red line, thus the military standoff between the two sides carries a very high risk of escalation. Question 3: What does Iran mean by saying that "the agreement's timeline never even began"? Has the ceasefire never taken effect? Answer: This is a cleverly crafted argument from both legal and factual perspectives by Iran. According to Iran's interpretation, although the interim agreement was signed and publicly announced, its actual implementation is contingent on both sides simultaneously fulfilling their commitments. Since the US committed what Iran considers a breach of contract within two days of signing and publicly withdrew within a week, the 60-day countdown stipulated in the agreement should not be considered as having begun. In other words, Iran believes the US was the first to breach the agreement. Therefore, until the US corrects its mistakes and reaffirms its implementation timetable, Iran has no obligation to abide by the ceasefire agreement, let alone "extend" a period that has never been effectively implemented. This position aims to shift the diplomatic burden onto the US while providing legal justification for continuing its blockade of the Strait and maintaining military operations. Question 4: Can international mediators (such as third-party countries) currently play a role? Is the negotiation truly hopeless? Answer: Currently, there are indeed third-party mediators conveying proposals between the two sides, with the main issue focusing on the point of "the US returning to the agreement and clarifying the implementation timetable." However, Iranian sources admit that "no progress has been made at all" on this issue. The mediation has failed because, on the one hand, the two sides lack basic mutual trust, making it difficult for any guarantee to be accepted by the other side; on the other hand, the domestic political atmosphere in the US makes it difficult for the government to show flexibility in making concessions to Iran, while Iran faces pressure from hardliners and the Revolutionary Guard, which does not allow it to show weakness on the Strait issue. Therefore, unless a major unforeseen event forces both sides to reassess the cost-benefit, or a more authoritative international guarantee mechanism emerges, the negotiation channel will likely remain blocked in the short term. Question 5: What will be the future trend of oil prices? What chain reactions will occur if the strait blockade lasts for more than six months? Answer: Currently, oil prices are in the range of $85 to $90 per barrel, which already includes a considerable geopolitical risk premium. If the blockade lasts for more than six months, it will first force Gulf oil-producing countries to use alternative land pipelines or detour around the Cape of Good Hope. However, the transport capacity of these two alternatives is far less than that of the strait passage, and the global daily supply gap may reach 3 to 5 million barrels. At that time, oil prices are very likely to return to above $100, or even challenge the previous high of $126. This will be followed by central banks around the world accelerating interest rate hikes to curb inflation, thereby suppressing economic activity, which in turn suppresses oil demand—forming a vicious cycle of "high prices suppressing demand, and weak demand suppressing prices." For Asian and European countries that rely on energy imports, widening trade deficits, currency devaluation, and rising industrial costs will pose serious challenges; while for the United States, although it has a large energy production, the disruption of the global supply chain will also push up its domestic consumer prices and exacerbate social and political pressures. Therefore, the duration of the strait blockade has become one of the most significant variables in the future prospects of global economic recovery. As of 09:31 Beijing time, Brent crude oil is trading at $88.09 per barrel.