Trump Cautions Iran of Serious Consequences if Prompt Deal is Not Reached

President Donald Trump cautioned that he may soon resume strikes on Iran as part of efforts to secure a deal to end the conflict, following his announcement that he had just called off a US attack.

“I hope we don’t have to engage in war, but we might need to deliver another significant blow,” Trump told reporters on Tuesday. When asked about the potential timeframe, he replied: “Well, I’m referring to two or three days, possibly Friday, Saturday, or Sunday. Maybe something early next week — a limited window.”

Trump’s statements have once again raised the prospect of rekindling hostilities with Iran, which has thus far refused to comply with Trump’s demands to abandon the remaining elements of its nuclear program after weeks of strikes that began in late February. Nevertheless, the president has repeatedly suggested — and then held back from — renewed military action since the truce was established on April 8.

The conflict has led to a closure of the Strait of Hormuz, a vital passage for oil and gas transport, resulting in a spike in global energy prices and inflation. Yields on the US Treasury’s long-term bonds surged to their highest levels in nearly two decades due to concerns about the macroeconomic implications of the Middle East conflict.

In a Tuesday afternoon address, Vice President JD Vance adopted a somewhat more optimistic stance on the negotiations, while also indicating the possibility of renewed strikes. “We believe we’ve made significant progress, and that the Iranians are looking to reach a deal,” he stated, adding that “option B” would be to resume military operations.

“But that’s not the president’s preference,” he continued. “And I don’t believe that’s what the Iranians desire either.”

Despite suffering losses of numerous senior leaders and a substantial portion of its military capabilities due to US and Israeli airstrikes, Iran’s government has remained resilient, frustrating US officials by maintaining control over Hormuz, which has propelled fuel prices in the US to their highest levels in nearly four years.

On Monday, Trump announced that he postponed a planned attack on Iran, which had been scheduled for Tuesday, at the request of Saudi Arabia, Qatar, and the United Arab Emirates. Previously, the president has acknowledged requests from allies and partners, including mediator Pakistan, as influences on his policy shifts regarding the Iran conflict.

Brent crude oil prices fell by approximately 1% on Tuesday, trading above $110 per barrel following Trump’s announcements late Monday. However, the benchmark has still risen by more than 50% since the conflict began with US-Israeli strikes on Iran, keeping traders on high alert regarding the potential for renewed hostilities.

Shipments through Hormuz have decreased once again, although traders are closely watching to see whether the NATO alliance will assist in ensuring safe passage for vessels if the waterway remains closed by early July.

While Trump’s remarks have typically influenced financial markets regarding Iran, market analysts have observed that this effect appears to be weakening as the president frequently issues threats that he does not follow through on.

“These verbal assertions from Trump used to trigger a significant bearish reaction in prices, but their influence now seems to be diminishing, unless supported by action,” remarked Bjarne Schieldrop, chief commodities analyst at SEB AB. “From what we can gather, no real progress has been made in negotiations between the US and Iran, with both sides firmly holding onto their initial demands.”

The fragility of the truce was underscored on Sunday when a drone struck the UAE’s Barakah nuclear energy plant, sparking a fire at the facility and requiring the use of emergency generators.

The United Nations’ nuclear watchdog announced late Monday that normal operations had resumed at Barakah, alleviating safety concerns regarding the largest atomic facility in the Middle East.

Tehran has suggested that it may launch strikes against its Gulf neighbors again if the US resumes its military activities.

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