• Iran confirms it is reviewing a recent US proposal aimed at ending the Gulf war, with no official acceptance yet.
  • Negotiations, mediated by Pakistan, may be moving toward a memorandum of understanding, but Tehran is pushing back on certain terms.
  • Markets remain volatile as investors weigh the potential for de-escalation versus continued tensions.

Tehran's Cautious Review

Iran announced on Friday that it is reviewing a US proposal to end the ongoing Gulf conflict, according to the semi-official Tasnim news agency. The statement signals that Tehran has not yet formally accepted the terms and may seek revisions on what it deems unacceptable conditions.

“The proposal is under careful consideration, and we will respond in due course,” a senior Iranian official said, speaking on condition of anonymity. The official added that Iran insists on guarantees regarding its security and red lines, particularly concerning the Strait of Hormuz and regional military posture.

The talks, which have been mediated by Pakistan, have recently progressed toward a draft memorandum of understanding. However, the Iranian review suggests a pause in the process, with negotiators waiting for formal approval from Tehran. Without a deal, the region faces continued instability, and Iran has warned of potential retaliation if its demands are not met.

Market Implications

Global markets have reacted sensitively to the news, with oil prices fluctuating amid uncertainty. Brent crude fell 1.2% in early trading on Friday before recovering slightly, as traders digested the possibility of a halt to hostilities that could ease supply concerns. Equities in the Gulf region also saw mixed performance, with the Saudi Tadawul index dipping 0.3%.

“The market is pricing in a 50-50 chance of a deal,” said a London-based energy analyst. “If the review leads to a breakthrough, we could see a sustained drop in oil prices. If it stalls, expect renewed volatility.”

Shipping insurers have also been on edge, with premiums for vessels transiting the Strait of Hormuz rising in recent weeks. Any durable progress in the negotiations could help stabilize these costs, but the current uncertainty is keeping risk premiums high.

Background and Next Steps

The US proposal is part of broader diplomatic efforts to reopen regional channels and de-escalate tensions that have fueled the Gulf war. Iran has historically demanded concessions on sanctions and security assurances before agreeing to any ceasefire. Mediators from Pakistan have shuttled between Washington and Tehran in recent weeks, but the outcome remains uncertain.

“This is a high-stakes moment,” said a former US diplomat familiar with the talks. “Iran is signaling it wants more clarity on what it gets in return. The next few days will be critical.”

Attempts to reach the US State Department for comment were unsuccessful. Pakistan’s foreign ministry declined to comment, citing the sensitivity of the negotiations.

Correction: A previous version of this article misstated the timing of Iran's review. The review began on Thursday, not Friday.

This article has been updated to reflect the latest market data.