President Donald Trump issued a stark ultimatum to Iran on Monday, calling the current round of negotiations the "last chance" to end a five-month conflict that's drained America's long-range missile arsenal and sent oil markets into fresh uncertainty. The warning came as Tehran flatly denied that direct talks with Washington were even taking place.
Trump told reporters in the Oval Office late Monday that negotiations were "going on right now" at Iran's request, along with Saudi Arabia, the United Arab Emirates, Qatar and others. But Iranian foreign ministry spokesperson Esmail Baghaei rejected the claim outright during a Monday press conference, saying there's no immediate plan for negotiations with the U.S. Tehran is currently only engaged in talks with Oman regarding the Strait of Hormuz, he said.
Diplomatic Confusion Rattles Markets
The mixed signals pushed oil prices higher Tuesday as traders recalibrated their expectations. West Texas Intermediate futures climbed 2.09% to $82.02 per barrel as of 4:53 a.m. ET, while Brent crude jumped 2.8% to $86.11 a barrel. Goldman Sachs analysts noted in a Tuesday report that traders were pricing "only a moderate risk premium despite still very high uncertainty about Mideast supply." They projected Brent would remain in its $80-90 range "until either a confirmation of a new U.S.-Iran deal or a significant escalation in attacks and targets."
In a Truth Social post earlier Monday, Trump described Iran's leaders as "unbelievably duplicitous" and accused them of lying about peace talks that were underway, "whether Iran wants to admit it or not." He added: "This is a last chance for them to sign a good document." Iranian President Masoud Pezeshkian said Tuesday that Tehran would continue to defend its borders but didn't seek an expansion of the conflict, according to state media reports.
Hormuz Blockade Tightens, Ship Struck
U.S. Central Command reported Monday it had redirected 44 commercial vessels as part of its ongoing blockade of the Strait of Hormuz, having disabled two and boarded two. CNBC said traffic through the strait remained largely slow, with six vessels — three tankers and three bulk carriers — transiting Monday, down from seven the previous day. The outlet also reported a ship was struck in the Hormuz Strait, adding to regional tensions and reinforcing the sense that diplomacy had stalled.
An Iraqi pro-militia outlet, Naya, reported late Monday that an explosion in Kuwait overnight could be heard in Basrah Province, further raising concerns about the conflict's regional spillover.
Missile Arsenal Nearly Exhausted
Reuters reported separately that the United States had used virtually all of its long-range precision missiles in the five-month war with Iran, raising concerns about military readiness for future conflicts. The revelation underscores the strategic costs of a prolonged engagement that's stretched American military resources while diplomatic progress remains elusive.
The arsenal depletion comes at a moment when Trump's administration faces pressure to either secure a negotiated settlement or prepare for an extended conflict that could further strain defense capabilities and drive energy prices higher. With both sides offering contradictory accounts of whether talks are even happening, the path forward remains deeply uncertain.
Why This Matters:
The conflicting narratives from Washington and Tehran reveal how far apart the two sides remain after five months of conflict that's depleted America's precision weapons stockpile and disrupted global energy markets. The near-exhaustion of long-range missiles raises serious questions about U.S. military readiness if tensions escalate elsewhere, particularly with China or in other strategic theaters. Oil markets are pricing in continued volatility, with every diplomatic setback threatening to push energy costs higher and squeeze American consumers and businesses. The Strait of Hormuz blockade continues to slow commercial traffic through one of the world's most critical energy chokepoints, with each incident adding risk premiums that ripple through global supply chains. Trump's "last chance" framing suggests the administration sees limited runway for diplomacy, raising the stakes for both sides and leaving markets to navigate an environment where miscalculation could trigger broader escalation.