Talks between the US and Iran to end the nearly four‑month war in the Middle East have stalled amid intense fighting between Israel and Hezbollah in southern Lebanon. On Saturday, Iran again shut down passage through the Strait of Hormuz over the fighting.

Iran has delayed negotiations that were meant to begin in Switzerland on Friday because of the ongoing fighting, Iran’s state-run broadcaster Press TV reported, citing Iranian Foreign Ministry spokesman Esmaeil Baghaei. Israeli attacks in southern Lebanon have violated the interim peace deal, he said.  

Under the terms of the agreement, the war on all fronts, including in Lebanon, should immediately end, Baghaei said. The US must also lift its naval blockade against Iran for the reopening of the Strait of Hormuz to commercial shipping, he said. 

The US and Iran signed on Friday an initial peace agreement aimed at ending the conflict between the two countries. The agreement includes a permanent end to hostilities, the Strait of Hormuz reopening within 30 days, removal of the US naval blockade, $12 billion in frozen Iranian assets, and a 60-day nuclear negotiating window extendable by mutual consent. 

The stalled talks and renewed clashes have injected fresh volatility into energy markets, with traders watching for any disruption to crude flows through the Strait of Hormuz. The uncertainty surrounding the peace process, sanctions relief, and Iran’s control over the Strait has kept Brent supported, despite a sharp weekly decline.

Brent Holds Steady

Oil markets reacted to the uncertainty. Brent crude futures closed at $80.68 a barrel on Friday. 

The international benchmark declined more than 9% for the week, though remains roughly 30% higher for the year.  

"The move follows a fast-tracked US-Iran peace agreement, with terms effective immediately," ING’s Ewa Manthey, Commodities Strategist, and Warren Patterson, Head of Commodities Strategy, wrote on Friday. "Iran expects a swift lifting of US oil sanctions, supporting a return of exports."

Although Brent has steadied, traders remain cautious amid shifting developments around the Strait of Hormuz. Ongoing questions over US‑Iran negotiations on a longer-term peace agreement have helped support prices.

Iran’s Persian Gulf Strait Authority (PGSA) said on Friday that maritime vessels passing through the Strait must apply for transit permits at least 48 hours before passage. The US, Europe and Gulf Arab states have balked at the idea of Tehran imposing fees. 

"Iran is reopening the Strait of Hormuz in a way that retains Iranian control over the strait rather than restoring the pre-war status quo," the Institute for the Study of War said on X on Saturday. "Some elements of the Iranian regime have argued that Iran should close the Strait of Hormuz to extract further concessions from the US, such as securing an end to Israeli operations in Lebanon and an Israeli withdrawal." 

Fighting Threatens Peace Deal

Fighting between Israel and Hezbollah in Lebanon has threatened the implementation of the agreement.

The Lebanese Army said on its X account on Saturday that Israel struck the south of the country and the Bekaa Valley, causing fatalities, injuries and extensive destruction of property. Lebanon’s state-run National News Agency said that 16 people were killed around the southern town of Nabatieh. 

The Israel Defense Forces said it had struck Hezbollah targets after the group launched more than 50 projectiles at its forces in southern Lebanon overnight, Bloomberg reported, citing an official who spoke on condition of anonymity in line with the military’s policy.

Iran has insisted that an interim peace deal include an end to Israeli military action in Lebanon. It didn’t send a delegation to Switzerland due to the fresh hostilities. Vice President JD Vance postponed his trip.

"Iran is attempting to compel the US to pressure Israel to end operations against Hezbollah," the Institute for the Study of War said. "Tying the US-Iran nuclear negotiations to the Lebanon issue not only helps Iran advance its strategic objective of preserving Hezbollah but also enables the regime to delay nuclear negotiations." 

Peace Efforts Continue

International efforts to end the fighting in Lebanon and to sustain the peace deal have continued.

Lebanese President Gen. Joseph Aoun spoke with Secretary of State Marco Rubio. Aoun emphasized the need to halt Israeli military operations in Lebanon.

Pakistan’s interior minister arrived in Iran on Saturday after planned talks between the US and Switzerland stalled. Iranian Foreign Ministry spokesman Baghaei told ISNA news agency that Pakistan’s interior minister had arrived in Iran as part of Islamabad’s efforts regarding the Iran-US negotiations.

Pakistan has been a key mediator between Tehran and Washington, with Qatar also joining the efforts in the run-up to the deal announced this week.

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