Trump rejects Iran peace plan as tensions escalate

WASHINGTON/DUBAI — Donald Trump rejected Iran’s latest proposal to end the war, deepening a diplomatic stalemate as tensions continue to disrupt global energy markets and raise concerns over prolonged conflict.

The U.S. president said Tehran’s plan — which delays negotiations over its nuclear program — falls short of Washington’s core demands.

Nuclear dispute blocks progress

The proposal from Iran would prioritize ending hostilities and reopening shipping routes before addressing its nuclear activities.

But Trump has made clear that any agreement must tackle the nuclear issue from the outset.

“We are not going to delay the central problem,” a U.S. official familiar with internal discussions said, underscoring the administration’s position.

The disagreement has stalled efforts to revive negotiations, despite ongoing mediation attempts led by regional actors.

Trump claims Iran in ‘state of collapse’

In a post on Truth Social, Trump said Iran had signaled internal instability while urging the U.S. to reopen the Strait of Hormuz.

“Iran has informed us they are in a ‘state of collapse’ and trying to figure out their leadership situation,” Trump wrote, without detailing how the message was conveyed.

Tehran has not publicly responded to the claim.

Power shifts inside Iran complicate talks

The diplomatic impasse comes as Iran faces internal uncertainty following the killing of Ali Khamenei earlier in the conflict.

His successor, Mojtaba Khamenei, has yet to consolidate authority, while the Islamic Revolutionary Guard Corps has taken on a more prominent role in decision-making.

Analysts say this shift may be hardening Iran’s negotiating stance and reducing flexibility in talks.

Shipping crisis intensifies pressure

Since the war began, Iran has largely blocked international shipping through the Strait of Hormuz, a critical route for global oil flows.

The United States has responded with its own naval blockade targeting Iranian vessels.

The disruption has been severe:

• Daily ship traffic has collapsed from over 120 vessels to just a handful
• Oil exports remain largely frozen
• Global supply chains face mounting strain

Oil prices surge as talks stall

Markets reacted swiftly to the diplomatic deadlock.

Brent crude climbed nearly 3%, reaching around $111 per barrel, as uncertainty over supply persists.

According to the World Bank, energy prices could rise sharply in 2026 if disruptions continue.

The situation has been further complicated by the decision of the United Arab Emirates to exit Organization of the Petroleum Exporting Countries, signaling fractures among key oil producers.

Sanctions and stalled diplomacy

As negotiations falter, Washington has escalated economic pressure.

The U.S. announced new sanctions targeting dozens of entities linked to Iran’s financial networks, accusing them of facilitating sanctions evasion.

At the same time, diplomatic momentum has slowed. Trump recently canceled a planned envoy trip to Pakistan, a key mediator in the talks.

Uncertain path forward

Iran’s proposal outlines a phased approach:

1. End the war and secure guarantees against renewed conflict
2. Resolve shipping and blockade disputes
3. Address nuclear issues at a later stage

But for Washington, postponing nuclear negotiations remains unacceptable.

With both sides entrenched and military presence increasing in the region, prospects for a near-term agreement appear limited.

A fragile stalemate

The conflict, now in its second month, has already killed thousands and disrupted global trade.

As diplomacy stalls and oil markets react, the risk of further escalation remains high — with no clear path to resolution.