Financial markets registered a brief moment of optimism Wednesday when news broke that Iran had submitted a ceasefire counter-proposal, even as the substance of Tehran’s demands made a quick resolution unlikely. Oil prices fell as investors hoped the exchange of peace plans signalled a path toward ending the conflict that had sent energy costs surging globally. The reality on the ground, however, told a more complicated story.
Iran’s rejection of the US plan came swiftly after Pakistani intermediaries delivered it. Tehran’s foreign minister acknowledged reviewing the 15-point proposal but said Iran had no immediate interest in negotiating. Officials described the American conditions — including nuclear disarmament and the reopening of the Strait of Hormuz — as unreasonable and designed to permanently weaken Iran’s strategic standing.
Tehran’s counter-proposal sought an end to strikes and assassinations, security guarantees, war reparations, and Iranian authority over the Strait of Hormuz. These demands reflect both Iran’s grievances and its calculation that it has enough leverage to set terms rather than accept them. The Strait of Hormuz, through which a fifth of global oil passes, sits at the heart of the current energy crisis gripping international markets.
Trump continued to project confidence that a deal was reachable, while simultaneously authorising additional military deployments to the region. The US was reportedly weighing an operation to seize Iran’s Kharg Island, which handles the vast majority of Iran’s oil exports. Such a move would dramatically escalate the conflict and potentially draw in other regional actors. Iran warned it would use extreme force to repel any landing force, including bombing its own territory.
The broader humanitarian and economic toll of the war was becoming increasingly visible. Trump’s approval rating fell to a record low of 36%, with a majority of Americans saying the war had exceeded acceptable limits. Israel’s continued strikes on Iran and Hezbollah positions in Lebanon drew criticism from UN Secretary-General António Guterres, who urged an end to operations and warned against replicating the destruction seen in Gaza. The path to peace remained unclear, contested by competing interests and deepened by accumulated mistrust.