President Donald Trump arrived in Las Vegas on Tuesday to promote his administration's tax cut policies while Republicans defend their congressional majorities, even as breakthrough negotiations on the Strait of Hormuz could reshape the economic and political landscape before November's midterm elections.
Trump landed at Harry Reid International Airport on Tuesday, Aug. 4, 2026, then told reporters traveling with him in California that a deal to reopen the Strait of Hormuz could come "tomorrow or the next day." He said, "A lot of progress has been made."
Economic Stakes and Political Pressure
The Nevada trip was designed to sharpen the contrast with Democrats on fiscal policy as Republicans battle for House seats. But Trump faces mounting pressure to end an unpopular war ahead of midterm congressional elections. The conflict, launched by the United States and Israel on Feb. 28 with goals including toppling Tehran's government and ending its nuclear program, hasn't achieved those objectives.
Closure of the strait—through which a fifth of the world's oil and natural gas once passed—has driven up the price of fuel and basic goods far beyond the region and roiled the global economy. Traffic through the critical waterway has been reduced to a trickle. The Trump administration had previously ruled out any deal that would give Iran control over the strait, which was an open international waterway before the war.
Oil prices initially eased on hopes of a deal that would allow shipping to resume but later inched upward. Brent crude, the international standard, was around $80 per barrel on Wednesday, still well below the levels it hit at the height of the conflict.
Deal Framework Takes Shape
Iranian and Omani negotiators finalized a draft deal to reopen the strait and were awaiting final approval from Iran's Supreme Leader Ayatollah Mojtaba Khamenei, who is believed to have been wounded in the war's opening strikes and hasn't been seen in public since then. Officials described the potential deal as a temporary solution tied to an agreement reached between the U.S. and Iran in June that aimed at ending the fighting and reopening the waterway but ultimately collapsed.
The potential deal would pave the way for the U.S. and Iran to resume negotiations on Tehran's nuclear program. Earlier, officials said the possible agreement would have ships enter the Persian Gulf through an Iranian-controlled route and exit through a route controlled by Oman, with service fees charged for security and preserving the maritime environment.
The U.S. said it's strongly opposed to any arrangement that would see Iran charge fees. Iran's Foreign Ministry spokesman, Esmail Baghaei, said the agreement with Oman is in the "final stage" of drafting and that a joint statement will be issued "if certain parties do not obstruct this process," apparently referring to the U.S.
Regional Instability Continues
Attacks on shipping continued even as hopes rose for a deal. The Iranian-backed Houthi rebels in Yemen claimed Wednesday they'd fired ballistic missiles toward a Saudi oil tanker in the Red Sea. Brig. Gen. Yahya Saree, a military spokesman for the Houthis, said in a prerecorded statement that the vessel was targeted off the Saudi port city of Yanbu. He didn't provide evidence, and there was no immediate comment from Saudi Arabia.
The attack was part of a recent escalation between the rebels and Saudi Arabia that threatens to reignite Yemen's civil war. In July, the Houthis announced they were closing the Bab el-Mandeb Strait that leads to the Red Sea for Saudi-linked shipping. On Tuesday, an Indian-flagged commercial ship sank in the Red Sea off Yemen after being struck by an explosive-laden boat, Yemeni and Indian authorities said. Yemen's coast guard rescued the crew. Another vessel sailing in the Red Sea off Yemen reported a loud explosion nearby, and the British military's United Kingdom Maritime Trade Operations center said the ship's crew was safe.
Lebanon Ceasefire Frays
The already shaky ceasefire between Israel and Iran-backed Lebanese militant group Hezbollah grew more volatile Wednesday, as the Israeli military issued an evacuation warning to residents of the southern Lebanese village of Mansouri, the first such warning in weeks. Israel said it was responding to Hezbollah's violation of the ceasefire agreement, which had largely held since June 20.
Later, the Israeli military said it had begun conducting "precise strikes" in southern Lebanon in response to what it described as "a blatant violation of the ceasefire" by Hezbollah. Lebanese and Israeli negotiators met in Rome for a second day to discuss implementation of a deal under which Israeli forces are supposed to withdraw from areas they're occupying in southern Lebanon in exchange for disarmament of Hezbollah.
A State Department official said Wednesday that the second day of talks in Rome had ended early "due to events on the ground" but could continue on Thursday, and said the "discussions focused on a range of political and military issues and were extremely productive."
Why This Matters:
The convergence of domestic political imperatives and international crisis negotiations illustrates the fiscal and strategic costs of unfinished conflicts. Reopening the Strait of Hormuz would ease pressure on energy markets and consumer prices, potentially stabilizing an economy battered by supply disruptions. But any deal that grants Iran fee-collection authority over what was an open international waterway represents a fundamental shift in regional power dynamics and commercial freedom. For Republicans defending congressional seats in November, the economic relief from lower fuel costs must be weighed against concerns about legitimizing Iranian control over critical infrastructure. The administration's original war aims—regime change and nuclear disarmament—remain unachieved, raising questions about whether diplomatic compromises now will lock in strategic losses. Meanwhile, continued attacks on shipping and ceasefire violations demonstrate that regional instability persists regardless of high-level negotiations, threatening both American interests and the fragile economic recovery that tax policy alone can't secure.