Trump Says Talks with Iran Underway; Tehran Denies Any Planned

  • U.S. President Donald Trump said on Monday, August 3, 2026, that talks with Iran were underway, warning that it was a “last chance” for Tehran to sign a deal to end the five-month-old war. However, Iran denied that any negotiations were taking place or that any meetings were planned.
  • According to Trump, the talks were being held at the request of Iran, Saudi Arabia, the United Arab Emirates and Qatar. His comments followed his decision over the weekend to call off what he described as “massive attacks” on Iran, repeating a pattern of threatening military action before stepping back.
  • However, Iran’s Foreign Ministry said no negotiations with the United States were taking place and no meetings were scheduled. According to Tehran, the only talks underway were with Oman over management of the Strait of Hormuz.
  • The Strait of Hormuz remains a central point of contention. Washington says the June memorandum required Iran to reopen the waterway, while Tehran maintains that the agreement preserved its authority over shipping traffic. Trump also repeated that the U.S. Navy had total control over the Strait.
  • Oil prices dropped sharply after Trump cancelled the planned attack, easing fears of a further disruption to Gulf supplies. Brent crude fell by about 7% to US$83.77 per barrel, while WTI declined to around US$80.34. Oil's sharp fall also sent the cost of government borrowing lower on Monday over hopes that it would ease inflation.
  • Despite the fall in prices, risks to oil supply remain. Shipping through the Strait of Hormuz continues to face disruption, while threats from Yemen’s Houthi rebels have caused some Saudi and Russian tankers to alter their routes.
  • The contradictory statements from Washington and Tehran suggest there is little prospect for a diplomatic resolution anytime soon. While the cancellation of the planned attack reduced the immediate risk premium in oil prices, continued shipping disruptions and uncertainty over whether talks are actually taking place could keep markets volatile.

(Sources: Reuters & Bloomberg)