• President Trump demands Iran's surrender, raising stakes in ongoing tensions.
  • Without a deal, the US could escalate military and economic pressure.
  • Tehran's response remains unclear, with diplomatic channels still active.

President Donald Trump on Thursday delivered a stark ultimatum to Iran, declaring that the Islamic Republic must capitulate or face further consequences. "Now Iran just has to say 'we give up,'" Trump said in a statement, according to a person familiar with the matter. The remark marks an escalation in rhetoric, as the administration pushes for a breakthrough in nuclear and regional talks.

Efforts to negotiate a new agreement have hit a snag in recent weeks, with both sides trading accusations of bad faith. The US has demanded Iran halt uranium enrichment and ballistic missile development, while Tehran insists on sanctions relief first. Without a deal, the US would be forced into a more aggressive stance, including potential military action, according to officials briefed on the discussions.

The ultimatum comes amid indirect talks brokered by Oman and other intermediaries, which have so far failed to produce a framework. A senior administration official, speaking on condition of anonymity, said the president's patience is wearing thin. "We've given diplomacy every chance, but Iran keeps stalling. The time for decision is now," the official said.

Market reactions were immediate, with West Texas Intermediate crude oil rising 2.3% to $73.40 a barrel on fears of supply disruptions. Analysts at Goldman Sachs (GS) warned that a conflict could drive prices above $100, though they noted that past escalations have often de-escalated through backchannel talks.

Reached for comment, Iran's mission to the United Nations did not immediately respond. However, state media quoted Foreign Minister Javad Zarif saying, "Iran will not bow to threats. We remain ready for fair negotiations, but not surrender."

The Stakes Grow Higher

The Trump administration has intensified pressure on Tehran since withdrawing from the 2015 nuclear deal, reimposing sanctions and designating the Islamic Revolutionary Guard Corps a terrorist organization. Trump's latest rhetoric signals a preference for a decisive outcome, either through a new pact or through force.

The situation has implications beyond the Gulf. European allies have urged restraint, while Israel has welcomed the hardline stance. In the background, defense contractors like Lockheed Martin (LMT) and Raytheon (RTX) have seen their stocks rise on expectations of increased spending, reflecting market bets on prolonged tension.

At a campaign-style rally in Miami on Wednesday, Trump warned Iran that "the bombs will be dropped" if negotiations fail, a threat that has alarmed diplomats but energised his base. "He's doing exactly what he promised: putting America first, by any means," said a Republican strategist close to the White House.

As of Friday morning, no further talks have been scheduled, but backchannel emissaries remain in touch. The next 48 hours could be decisive.

Correction: An earlier version of this article misstated the day of Trump's statement. It was Thursday, not Wednesday.