Rubio Dials Down Hopes for Iran Breakthrough as Trump Leaves Door Ajar

Rubio tempers expectations

Marco Rubio told reporters in Florida that negotiations with Iran are not close to a breakthrough. He said various countries are engaging with ideas, but "I wouldn't say we're on the verge of a breakthrough."

He argued the diplomatic track has yielded little so far because of what Tehran wants. In his words, "it hasn't been very productive because the Iranian demands are simply not just unacceptable, but in some cases outrageous and ridiculous and really unrealistic." Rubio spoke before flying to Paris for meetings with Group of Seven counterparts, where the Iran war is set to be discussed.

Trump signals limited strikes if talks advance

Donald Trump struck a different tone in remarks reported by CNN. In a Sunday phone call cited by the network, he said, "It depends on whether or not they sign a very strong agreement," adding, "The answer is: highly unlikely it will be necessary."

He also said, "I would if necessary, but we hit them really hard." Trump has said his unpopular war contributed to Republicans' decisive loss in the Nov. 3 midterm elections. According to Trump, the campaign - launched in late February by US and Israeli strikes on Iran - was justified as a bid to stop Tehran from acquiring nuclear weapons. The fighting has pushed oil and gasoline prices higher.

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Terms on the table and the go-between

Iran has previously set conditions for peace talks that include ending a naval blockade of its Persian Gulf ports and lifting sanctions. Washington's position is that Tehran should restore access through the Strait of Hormuz and agree to constraints on its nuclear program.

Diplomacy regained attention after the midterms. Qatar - serving as the principal intermediary between the US and Iran - said last week that Tehran is weighing proposals concerning its nuclear activities. Trump also held a recent call with Qatar's leader, Emir Sheikh Tamim Bin Hamad Al-Thani, to discuss de-escalation, indicating he remains interested in bringing the war to a close.

Yet Iran's foreign minister, Abbas Araghchi, said Sunday that "there has been no activity or movement from the mediators" in recent days following the US elections. He told the state-run Islamic Republic News Agency that what remains uncertain is how long it will take mediators to adjust to the results and what path they will choose.

Why it matters for your portfolio

This standoff is moving commodity markets. A war that began in late February and has raised fuel costs meets negotiations that may, or may not, ease supply risks. The bottom line: energy price swings remain tied to the next headline, and so does the pressure on inflation-sensitive parts of your portfolio.

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