(Zero Hedge)—President Trump has warned Iran on Sunday that the “clock is ticking” as Pakistani-mediated talks have not only stalled, but show no signs at all of restarting anytime soon. “They better get moving, FAST, or there won’t be anything left of them,” he wrote on Truth Social. “TIME IS OF THE ESSENCE!”
He spoke the same day with Israeli Prime Minister Benjamin Netanyahu, who along with Lindsey Graham has been calling for resumption of robust anti-Tehran action to ensure Iran can never go nuclear. Trump’s words have been somewhat of a familiar refrain going back several weeks.
As we detailed below, Iran says it received a counter proposal of ‘5 conditions’ for peace from the White House. In many ways they are directly opposite the 5 conditions Iran sent to the US last week, which Trump had rejected as “garbage”.
But as yet there’s been no indicator that the US side has attached a timeline to its latest demands. Trump is perhaps pushing this new “clock is ticking” as a timeline threat of sorts. But again, there was no specific date included in the fresh warning.
Last week Bloomberg Intelligence circulated a report titled, Iran Rejects Trump’s Offer – Return to War Likely. It concluded:
The diplomatic dance continues: the US and Iran exchanged offers yet again. But they remain far apart, shooting maximalist demands at each other. A comprehensive peace deal is unlikely to materialize. We think the US and Iran will likely return to strikes. But we expect an intense exchange of fire to be temporary and reduce to lower-levels of fighting – what we call the new normal in this protracted conflict.
More from the Bloomberg Intelligence analysis:
Short but Intense… and Costly
Trump doesn’t want long war. His popularity is taking a hit as its economic impact is being felt.
We think Trump will likely revert to a short air and missile strike campaign on Iranian infrastructure, military positions, and energy assets while simultaneously continuing the blockade. Tehran will likely respond with strikes of its own, both on US military assets and America’s regional partners. But we expect this to be a short bombardment, rather than the sustained, high-intensity strike campaign that marked the beginning of the war.
The war has already imposed a heavy economic cost. Oil markets flipped from an expected record surplus to historic supply disruption. Major central banks, facing fresh inflation risks, are turning more hawkish. Consumers now pay more for energy, while their borrowing costs also rise, and the future grows more uncertain.
The longer the Strait of Hormuz remains closed, the more it will drain the oil stockpiles cushioning governments, companies, and consumers today. Once inventories run thin, prices need to do the hard work: rising high enough to curb demand back in line with available supply.
Since that report was issued, nothing has changed, and both sides seem to have dug in their heels even more.
According to a Sunday report from Iran’s semi-official Fars news agency, the United States has laid down a firm, take-it-or-leave-it ultimatum to Tehran. Both sides are still trying to patiently wait out the Hormuz crisis, hoping to inflict more economic pain on the other until they blink.
At the top of the list, the US is demanding a near-total dismantling of Iran’s atomic ambitions, “allowing only one Iranian nuclear facility to remain operational.”
The list includes direct rejections in response to Iran’s own five conditions from a week ago, which President Trump said were “unacceptable” and “garbage”.
For example the US is refusing to pay compensation for damage caused during strikes on Iranian territory – a ‘maximalist’ sticking point which Tehran had demanded previously.
Washington is also reportedly insists that 400 kilograms of enriched uranium be transferred from Iran to the US, while only one active nuclear facility would remain operational inside the Islamic Republic.
Iran for its part has recently vowed to never transfer its nuclear material out of the Islamic Republic, calling the issue a matter of national sovereignty and energy security which it alone has say over. This after even Russia offered to take it.
The newly reported five conditions by the US side further states that the US does not intend to release more than 25% of frozen Iranian assets. Tehran has demanded the dropping of all US sanctions as a key basis for lasting settlement.
Here are the five newly proposed Washington conditions, which some pundits have called ‘wishful thinking’:
- No war compensation from US
- Give up 400kg of Highly Enriched Uranium to US
- Iran can only have on nuclear facility to remain active
- Not more than 25% of frozen assets to be unfreezed
- Halting war on all fronts depends on negotiations
So this leaves a huge distance between the Washington list and Tehran’s list, as the seemingly unbridgeable gulf remains, also as Iran is digging in its heels.
As a reminder, the below is the Islamic Republic’s list, which it hasn’t backed down from. It has offered the following as the only basis on which to restart talks:
- Ending the war on all fronts, including Lebanon
- Lifting all sanctions
- Releasing frozen Iranian assets
- Compensation for war damages and losses
- Recognition of Iran’s sovereign rights over the Strait of Hormuz
While a Pakistani-mediated ceasefire managed to take effect on April 8, subsequent talks in Islamabad completely collapsed, but then President Trump later extended the truce indefinitely, likely to buy time and to figure out “what’s next” – while seeking a complete blockade of Iranian oil exports, and of all vessels entering or exiting Iranian ports.
With Washington demanding total disarmament and Iran demanding control over the world’s most critical oil transit choke point, the stage is set for a likely coming renewal of direct clashes, given the zero sum demands of each side now on the table.
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