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The Failed Dealmaker: Trump's Iran Dilemma For weeks, Donald Trump has tried to find a way to end the war he started with Iran – a deal that would allow him to declare victory and move past the conflict before it causes severe damage to the global economy and sinks Republican chances in the US midterm elections. But the self-proclaimed master dealmaker can't seem to stop sabotaging his own negotiations or to acknowledge that Iran is now in a better position to demand concessions than it was before the war. Strategic Missteps: From Military Action to Negotiation Deadlock Over the Memorial Day holiday, Trump skipped his eldest son's wedding in the Bahamas and canceled plans to spend the weekend at his New Jersey golf club. The last-minute changes heightened speculation that Trump was ready to unveil a deal to end the war. Trump then announced that he would hold a cabinet meeting at Camp David, the presidential compound in Maryland that has been the site of historic diplomatic summits. But that meeting was moved back to the White House, as it became clear that Trump had not been able to close a deal he could announce with great fanfare. The Art of the Deal: Trump's Negotiation Paradox Why has an agreement eluded the business titan who wrote the bestselling 1987 book The Art of the Deal? Trump admires strongman leaders and is loth to project any sign of weakness – and he's afraid of reaching a deal with Iran that makes him look weak. The president is also sensitive to criticism that any agreement he negotiates will be worse for the US than the 2015 nuclear deal between Iran and six world powers, which was brokered by Barack Obama's administration. Leverage Reversed: How Iran Gained the Upper Hand Trump's main problem is that Iran has more leverage than he does – and Iranian leaders are well aware of that advantage. On 28 February, Trump launched a joint US-Israeli war against Iran, killing the supreme leader, Ayatollah Ali Khamenei, and other top military and political officials. But Iran retaliated with missile and drone strikes against US military bases across the Middle East, and it targeted the energy infrastructure of its Gulf neighbors. Iran also deployed its most effective economic weapon: it closed the strait of Hormuz, through which more than a fifth of the world's oil supply passed each day. Economic Fallout: Global Disruption and Rising Oil Prices The closure of the Strait of Hormuz – along with Iranian attacks on pipelines and gas fields in Kuwait, Saudi Arabia, Qatar and the United Arab Emirates – disrupted the global economy and increased oil prices. In the US, average gas prices have jumped by 50%, up to nearly $4.50 per gallon, since Trump launched the war. Trump and his ally, the Israeli prime minister, Benjamin Netanyahu, could not topple the Islamic regime that rose to power after Iran's 1979 revolution. Instead, they ended up strengthening it – by allowing Tehran to deploy its geographic control of the strait of Hormuz into a weapon that could instigate a global energy crisis and a worldwide recession. The Emerging Deal: Limited Concessions and Unresolved Issues The emerging deal is focused on solving a problem that didn't exist before Trump started this war: fully reopening the strait of Hormuz to commercial shipping so that oil prices can stabilize. Under a draft agreement being circulated to US allies, Washington would also lift its blockade of Iranian ports and allow Tehran to access about $12bn in frozen assets. Once again, Trump seems to be aiming for a limited deal with Iran that defers the most difficult questions to future talks, which could drag out for months or even years. Iran's Resilience: Military Strength Preserved In some ways, Iran has emerged stronger after a war intended to decimate its military capabilities. A CIA report sent to Trump earlier this month found that Tehran had managed to retain a significant part of its missile capabilities. The analysis said Iran preserved about 70% of its prewar stockpile of missiles and about 75% of its mobile launchers. The report also concluded that Iran was more resilient than US officials had claimed, and it could survive a naval blockade for months. Political Calculations: Midterm Elections and Trump's Dilemma At his cabinet meeting, Trump said he didn't care about the midterm elections and wasn't in a rush to reach a deal. "It's got to be perfect," Trump told reporters, adding: "I didn't do this to get a crummy agreement." Despite his weak position, Trump insists that he will strike a better deal with Iran than the one negotiated by the Obama administration in 2015. That agreement provided Tehran with relief from international sanctions in exchange for limits on its nuclear enrichment. The Unintended Consequences: Strengthening the Adversary Trump could have avoided starting a regime-change war that failed, leaving the world to deal with its consequences. Instead, the master negotiator handed Iran a new economic weapon – and more leverage to extract a favorable deal. The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you're dead. Trump wrote in his famous book. The best thing you can do is deal from strength, and leverage is the biggest strength you can have.

The Countdown to Trump’s Final Determination on a US‑Iran DealPresident Donald Trump signalled on May 30, 2026 that he would make a “final determination” on a potential agreement to end the Iran‑U.S. conflict, while Iranian chief negotiator Mohammad Bagher Ghalibaf warned Tehran would only act after Washington takes concrete steps.Financial Stakes: $1.5 Trillion Defence Investment and 3.5 % GDP TargetsUS Defense Secretary Pete Hegseth announced a $1.5 trillion defence spending boost, urging allies to allocate at least 3.5 % of GDP to defence.The pledge underscores the economic dimension of the Iran negotiations, linking security commitments to massive fiscal outlays.Regional Flashpoints: Israeli Advances in Lebanon and Ongoing Air AlertsIsraeli Prime Minister Benjamin Netanyahu confirmed troops have crossed the Litani River, expanding operations northward in southern Lebanon.The Israeli military reported intercepting projectiles from Lebanon and a near‑miss in northern Israel, though no casualties were reported.US Central Command (CENTCOM) displayed an F‑16 patrol over the Middle East, signalling continued US presence.Strategic Implications for US‑Iran Relations and Middle‑East StabilityThe divergent statements from Washington and Tehran highlight a stalemate: the US demands concrete Iranian concessions, while Iran insists on reciprocal US actions. Simultaneously, heightened Israeli‑Lebanese hostilities risk drawing additional regional actors into the conflict.What Comes Next: Scenarios for the Next 30 DaysBest‑case: A limited agreement is reached, easing naval restrictions in the Strait of Hormuz and reducing immediate combat operations.Mid‑case: Negotiations stall, leading to a continuation of proxy clashes and increased US defence spending.Worst‑case: Escalation in Lebanon triggers broader regional involvement, potentially expanding the war beyond current borders.

The Lead: Trump's Decision Point on IranUnited States President Donald Trump has announced he is meeting in the Situation Room to make a "final determination" on a possible deal with Iran that could extend the ceasefire and reopen the Strait of Hormuz. The announcement comes amid deep mistrust between the two sides, with Iran's top negotiator emphasizing that Tehran will judge any agreement by actions rather than promises.The Proposed Deal: Conditions and ConcessionsIn his latest post on the Truth Social platform, Trump outlined numerous conditions for Tehran to accept, including: never developing a nuclear weapon, ensuring the Strait of Hormuz remains open in both directions without tolls, removing any remaining mines in the Strait, and allowing the US to unearth and destroy Iran's enriched uranium. Trump also noted that ships caught in the Strait due to the US naval blockade "may start the process of 'heading home!'" and that "no money will be exchanged until further notice."The Diplomatic Context: Uncertainty and Mixed SignalsUncertainty about the details of a memorandum of understanding (MOU) has grown over the past week amid ongoing distrust between the US and Iran as they seek to end the three-month-long war. While White House sources indicated that the US and Iran had reached a tentative agreement to extend the ceasefire by 60 days, Trump has yet to sign off. Iranian state news outlet Fars reported that the agreement was in its final stages of ratification, but stressed there were no provisions about destroying Iran's nuclear materials in the MOU.The Iranian Position: Actions Over PromisesIran's top negotiator, Mohammad Bagher Ghalibaf, emphasized Tehran's position that "no action will be taken before the other side acts," stating that "guarantees and words, only actions are the criterion." He added that "the winner of any agreement is the one who is better prepared for war the day after," highlighting the deep-seated mistrust that continues to plague negotiations between the two nations.The Regional Implications: Strait of Hormuz and BeyondThe potential reopening of the Strait of Hormuz represents a significant development in the region, with arrangements potentially including monitoring and inspection of ships. This critical waterway is vital for global oil supplies, and its closure has had substantial economic impacts. Any agreement that successfully reopens the Strait would mark a major diplomatic achievement, though the long-term sustainability of such an agreement remains questionable given the history of mistrust between Washington and Tehran.The Path Forward: Final Decision and Implementation ChallengesAs Trump prepares to make his "final determination," the coming days will be crucial in determining whether this potential deal can move from tentative agreement to formal implementation. Al Jazeera's Patty Culhane noted that in the past, the Trump administration has indicated that a deal has been reached, only to later find out it has not. If this deal were to materialize, it would represent "the entire wishlist of what the US was demanding and none of the concessions that Iranian were asking for," suggesting significant challenges in achieving a balanced agreement that satisfies both sides.

Lead: Overview of the tentative 60‑day cease‑fire extensionOfficials from the United States and Iran say they have drafted a preliminary memorandum of understanding (MOU) that would prolong the existing cease‑fire for 60 days and launch negotiations aimed at ending the war permanently. The framework still requires final sign‑off from President Donald Trump and has not yet been publicly confirmed by either side.Key provisions of the proposed memorandumStrait of Hormuz: Shipping would become “unrestricted,” mines removed within 30 days and the U.S. naval blockade lifted proportionally.Sanctions and aid: The U.S. would waive selected sanctions, allow Iran to sell oil freely, and discuss humanitarian aid and the unfreezing of billions of dollars in frozen assets.Nuclear commitment: Iran would pledge not to pursue a nuclear weapon and negotiate the disposition of its estimated 440 kg of 60 % enriched uranium.Regional conflicts: The agreement envisions an end to Israel’s offensive in southern Lebanon and a broader discussion of Iran’s support for proxy groups.Numbers that shape the deal60 days – the duration of the cease‑fire extension.20 percent – share of global oil and LNG that transits the Strait of Hormuz under normal conditions.$2 million – tolls some vessels have been forced to pay during the conflict.Billions of dollars – value of Iranian assets currently frozen abroad.Strategic implications for the region and global marketsUnrestricted passage through the Strait of Hormuz would ease pressure on global energy prices, which have been volatile since the blockade began in April. A credible nuclear‑non‑proliferation commitment could reduce the risk of a regional arms race, while sanctions relief would provide Iran with much‑needed foreign exchange. The cessation of Israeli operations in Lebanon could also de‑escalate the broader Israel‑Iran proxy confrontation.What the next 60 days could mean for peace talksIf the MOU is ratified, the 60‑day window will become a high‑stakes diplomatic sprint. Negotiators are expected to focus first on the fate of Iran’s enriched uranium stockpile, followed by detailed discussions on sanctions, proxy support and a permanent cease‑fire mechanism. Continued skirmishes—such as recent U.S. strikes near the Strait of Hormuz and Iranian drone attacks—highlight the fragility of the pause and underscore the importance of swift, coordinated implementation.

Investors priced in the possibility of a cease‑fire between the United States and Iran, sending the world’s key oil benchmarks lower and sparking a broad rally across Asian stock markets.Oil Prices Slide as Peace Draft Sparks Market OptimismThe market reaction followed a draft peace agreement circulated by Donald Trump and reported by Axios, which suggested a 60‑day extension of the cease‑fire. Analysts at Deutsche Bank noted “mounting optimism about an end to the conflict,” shifting sentiment away from stagflation concerns.Price Movements: Brent Down 1.3% and WTI Down 1.4%Brent crude futures fell 1.3% to $91.54 a barrel, on track for a 17% monthly decline since early May.West Texas Intermediate (WTI) dropped 1.4% to $87.64 a barrel, 7% below the week’s peak of $94.70.Regional Market Reactions: Asian Gains and European StabilityJapan’s Nikkei 225 rose 2.5%.South Korea’s KOSPI climbed 3.6%.Hong Kong’s Hang Seng gained 0.9%.China’s CSI 300 slipped 0.45%.UK’s FTSE 100 opened 0.1% higher; the broader Stoxx Europe 600 up 0.3%.U.S. S&P 500 had risen 0.6% the previous day, pushing the index to a new record high.U.S. 10‑year Treasury yields fell to 4.45%, supporting bond price gains.What the Next Weeks Could Hold for Energy MarketsIf the tentative cease‑fire holds, oil demand forecasts could be revised upward, limiting further price declines. However, lingering uncertainty over the strait of Hormuz and Iran’s nuclear ambitions means volatility may persist. Traders will watch for official confirmations from the U.S. vice‑president JD Vance and any concrete steps to reopen the strait, which could stabilize supply and temper market swings.

US‑Iran diplomatic channels are reportedly close to a framework that would extend the current cease‑fire by 60 days and open nuclear talks, though President Donald Trump has not yet signed off. The proposal would keep the Strait of Hormuz open, require Iran to clear sea mines within 30 days and lift the U.S. naval blockade if commercial traffic resumes.Progress Toward a 60‑Day US‑Iran Ceasefire ExtensionCeasefire talks: Both governments are negotiating a tentative deal to prolong the truce and start nuclear discussions.Maritime traffic: Non‑Iranian vessels from Singapore, UAE, South Korea and Norway have resumed transiting the Strait of Hormuz.Regional diplomacy: Pakistan’s Deputy Prime Minister Ishaq Dar will meet Secretary of State Marco Rubio in Washington to focus on the Iran conflict.Key Figures: Vessel Traffic and Sanctions NumbersAt least four foreign‑flagged ship categories have increased passage through Hormuz in the past days.The U.S. Treasury announced new sanctions targeting multiple companies, individuals and vessels linked to Iran’s military and oil sales, including a Hong‑Kong‑based network.Regional Ripple Effects: Gulf States, Israel, and LebanonKuwait and UAE condemned a ballistic missile incident they described as Iranian aggression.Qatar’s Emir discussed the tension with President Trump, emphasizing Doha’s role in hosting ceasefire talks.Israel announced plans to control up to 70 % of Gaza, raising concerns of broader displacement.Lebanon suffered Israeli strikes killing at least 17 civilians, ahead of U.S.‑mediated military talks.What Comes Next: Negotiation Paths and Potential FlashpointsIf the 60‑day extension is signed, the next phase will focus on Iran’s uranium enrichment program.Continued missile incidents or further Israeli advances in Gaza could reignite broader regional fighting.Sanctions pressure may push Iran toward compliance, but visa issues for its World Cup team highlight lingering diplomatic friction.

The Lead: Asian Markets React to Diplomatic DevelopmentsAsian stocks are rising today amid hopes of a US-Iran peace deal and the potential reopening of the Strait of Hormuz, a critical shipping route that has been impacted by regional tensions. The positive market sentiment comes as US President Donald Trump has circulated a draft peace agreement among allies, including Israel, which could significantly alter the geopolitical landscape in the Middle East.The Event Details: US-Iran Peace Proposal TermsPresident Trump has shared a draft peace agreement for the war with Iran, similar to proposals circulating throughout the Middle East. The key provisions include:Opening the Strait of Hormuz to commercial shippingLifting the US blockade of Iranian portsProviding Iran with access to up to $12 billion (£9 billion) in frozen assetsTargeting the return of commercial shipping in the strait to pre-war levels within 30 daysAnticipating negotiations lasting up to 60 days on Iran's nuclear programThe Data Analysis: Market Performance and Oil ImpactAsian markets are showing strong gains across the board:Japanese Nikkei: +2.65%Hong Kong's Hang Seng: +0.9%South Korean Kospi: +3.6%TSMC (chip maker): +2.6%Samsung Electronics: +6%SK Hynix: +0.6%Concurrently, oil prices have declined, with Brent crude falling approximately 1% to $93.02 per barrel. The price drop reflects investor calculations about the potential impact of the Strait of Hormuz reopening on global oil supplies.The Impact Analysis: Regional and Global Economic ImplicationsThe potential peace deal between the US and Iran could have far-reaching implications for global markets and regional stability. The reopening of the Strait of Hormuz, through which approximately 20% of global oil trade passes, could significantly impact energy markets and shipping routes. Additionally, the lifting of port blockades and access to frozen assets could stimulate Iran's economy and create new trade opportunities in the region.The rally in Asian tech stocks, particularly semiconductor manufacturers, suggests that while geopolitical tensions are easing, enthusiasm for artificial intelligence and related technologies continues to drive market sentiment in the region.The Prediction: Market Trajectory and Upcoming Economic IndicatorsAs diplomatic negotiations progress, markets will likely continue to react to developments in the US-Iran peace process. The coming weeks will be critical as the 60-day negotiation period on Iran's nuclear program unfolds. Investors should also monitor upcoming economic indicators that could influence market sentiment:French inflation report (7.45am BST)Spanish inflation report (8am BST)Andrew Bailey speech at the Reykjavik 2026 economic conference (9.20am BST)Germany inflation report (1pm BST)Canadian Q1 2026 GDP (1.30pm BST)The interplay between geopolitical developments and economic data will likely shape market direction in the coming weeks.

U.S. inflation accelerated to its fastest pace in three years in April, as energy prices surged amid the war with Iran, prompting expectations that the Federal Reserve will maintain a restrictive rate stance well into next year.April Inflation Surge Tied to Iran ConflictThe war in the Strait of Hormuz disrupted oil shipments, pushing national average gasoline prices up 12.3% in April and lifting overall energy costs by 5.5%. These supply‑chain shocks fed through to broader price indices, reigniting concerns about inflationary momentum.Numbers Reveal Sharpest Price Gains Since 2023Personal consumption expenditures (PCE) price index rose 3.8% year‑on‑year, the largest increase since May 2023.Core PCE (excluding food and energy) climbed 3.3% YoY, up from 3.2% in March.Month‑on‑month, the overall PCE index advanced 0.4% after a 0.7% jump in March.Goods prices increased 0.7%, with food prices rebounding 0.5%.Consumer saving rate fell to 2.6%, the lowest level since June 2022.Broader Economic and Political RamificationsHigher inflation is eroding real disposable income for the third consecutive month, pressuring household consumption that accounts for more than two‑thirds of U.S. economic activity. The rising cost‑of‑living environment is also denting President Donald Trump's approval ratings ahead of the 2024 election, while the Republican majority in Congress faces heightened scrutiny ahead of the November midterms.Outlook for Fed Policy and Consumer SpendingFinancial markets expect the Federal Reserve to keep its benchmark rate in the 3.50%–3.75% range through 2027. New Fed chair Kevin Warsh has signaled a “reform‑oriented” agenda but faces pressure from the White House to lower rates. Meanwhile, consumer spending edged up only 0.1% in April after a 0.3% rise in March, suggesting a tentative pullback as households grapple with stagnant real wages.

Tensions Rise in the Taiwan Strait Taiwan has said it is monitoring the second Chinese “joint combat readiness patrol” near the island in a week, accusing Beijing of being the sole source of instability in the Asia Pacific. Details of the Chinese Patrol Taiwan’s National Defence Ministry said on Tuesday it had detected 29 Chinese aircraft, including fighter jets, and seven warships operating around the island. The ministry reported that 24 of the aerial sorties had crossed the median line, an unofficial maritime and aerial buffer zone that runs through the middle of the Taiwan Strait. The Impact on Regional Stability Joseph Wu, secretary-general of Taiwan’s National Security Council, accused China of being the sole source of instability in the Asia Pacific region. “For the 2nd time in a week, shortly after the Beijing summit, the PLA conducted a ‘joint combat readiness patrol’ around Taiwan. We also spotted the Liaoning carrier group in the West Pacific. This is unprovoked. The PRC is the sole source of instability in the IndoPacific,” he wrote on X. The US Role in the Region The US is Taiwan’s largest weapons supplier and is bound by law to provide the island with the means to defend itself. In December, Trump approved the largest-ever US weapons package for its ally. However, last week, Washington said it was pausing a $14bn arms sale to Taiwan to conserve munitions for the war on Iran. The Future Outlook Earlier this month, President Xi Jinping warned Trump that their two countries could clash over Taiwan if the issue is mishandled. Since then, Trump has cautioned Taipei against formally declaring independence from China, prompting the island to issue a statement saying it was “sovereign and independent” but planned to maintain the status quo.