On Friday, the US military stopped its bombing campaign against Iran after nearly two weeks of strikes. The goal, according to diplomats, was to give peace talks "some space."
Rumors have suggested that the United States' decreasing reserves of important ammunition are influencing its military choices.
President Donald Trump denied any shortage, telling reporters on Air Force One, "We have a lot of ammunition, different types." He added, "We have a lot of the mid-level stuff too. I mean, more than we could ever use, no matter what." Trump additionally faulted ex-President Joe Biden, stating that his predecessor "gave a lot to Ukraine, and so we're building that up, but we have a lot."
Israeli Prime Minister Benjamin Netanyahu, who jointly initiated the conflict with Iran about five months ago, said he plans to meet with Trump to discuss the conflict. In a post on X, Netanyahu wrote, "Our goal is clear: to safeguard Israel's security, strengthen its power, and expand the circle of peace around us."
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When trading opened on Monday, July 27, oil prices fell sharply, dropping more than 7%.
That move makes sense when you look at what is at stake. Before the conflict, roughly a fifth of global oil supply passed through the Strait of Hormuz. The strait has been under a US blockade, and Iranian Foreign Ministry spokesperson Esmail Baghaei stated on Monday that conditions in the Strait of Hormuz have "not changed and it is still closed."
So even though the US paused its strikes, the oil route is still shut. And Iran says it has no direct talks with the US. Baghaei told reporters that Iran "currently have no negotiations with the United States." Instead, Oman is mediating the discussions. Baghaei described the Friday and Saturday talks with Oman as "useful discussions."
The pause only involves the main actors - the US and Iran. Other players are still shooting.
Saudi armed forces launched attacks against Houthi targets in Yemen that are supported by Iran, after the rebel group's recent assaults on ships in the Red Sea. In a separate incident, Ukraine's armed forces allegedly hit an Iranian cargo ship on the Caspian Sea, resulting in one sailor dead and another wounded.
Deutsche Bank analysts summed up the situation in a Monday note: "The main market risk remains the energy and shipping front. Traffic through Hormuz remains severely disrupted, while the conflict has broadened into the Red Sea. This raises the prospect of simultaneous disruption to both Gulf and Red Sea export routes. So a welcome pause from the main actors but a fragile one, especially with side battles still ongoing."
Negotiators must resolve major issues including: assurances for safe sea passage and the restoration and normalization of toll-free, two-way movement through the Strait of Horn of Hormuz.
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