Iran seeks deal with US, but Trump says terms aren’t right yet

President Donald Trump said on August 17 that Iran wants to strike an agreement with the United States, but the terms being offered don’t meet Washington’s requirements. The statement effectively confirmed what observers had suspected for weeks: the diplomatic window opened by a June memorandum of understanding between the two countries is closing fast.

The MOU, signed on June 17 by Trump and Iranian President Masoud Pezeshkian, was supposed to be a framework for re-establishing peace and normalizing relations. It included provisions to reopen the Strait of Hormuz and set a 60-day timeline for deeper discussions on sanctions relief and nuclear commitments. That 60-day clock has now run out with little to show for it.

Sanctions pressure is intensifying

Washington has sanctioned over 100 vessels tied to Iran’s maritime operations in 2026 alone, targeting the shipping infrastructure that Tehran relies on to move crude oil to buyers, primarily in China.

Treasury Secretary Scott Bessent raised the stakes further on August 20, signaling that the US could impose what he described as the harshest sanctions in history against Iran.

At one point during negotiations, a reconstruction fund of $300 billion for Iran was discussed, a figure that gives some sense of the scale of economic incentives on the table.

The Strait of Hormuz factor

The Strait of Hormuz, a narrow waterway between Iran and Oman, handles roughly a fifth of the world’s daily oil consumption and a significant share of global liquefied natural gas trade.

During earlier disruptions to Hormuz traffic, Brent crude exceeded $138 per barrel.

Iran’s oil exports have been further complicated by the sanctions regime. Most of Tehran’s crude sales flow to China through opaque, sometimes covert trading networks designed to evade US restrictions.

What this means for energy markets and beyond

Oil price volatility is the most direct consequence. Every time a senior US official mentions “harshest sanctions in history,” crude futures traders recalibrate their models. And every time an Iranian military vessel conducts exercises near the strait, risk premiums on tanker insurance tick upward.

Trump’s framing of the situation, acknowledging that Iran wants a deal while insisting the current terms aren’t acceptable, leaves the door technically open. But the simultaneous escalation of sanctions suggests Washington is betting that more pressure, not more patience, will eventually move Tehran.

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