Iran has pulled the plug on negotiations with the United States, conditioning any resumption of talks on a full halt to Israeli military operations in Lebanon and Gaza. The move comes alongside threats to close the Strait of Hormuz, the narrow waterway through which roughly 20% of the world’s oil trade flows.
Bitcoin dropped below $73,000 amid the escalation in late May 2026, with nearly $1 billion in liquidations hitting crypto markets as traders scrambled to de-risk.
The negotiation breakdown
Multiple rounds of diplomacy have unfolded throughout 2026, with Pakistan and Qatar serving as mediators. Significant meetings took place in Islamabad in April and Doha in May, producing what appeared to be a tentative framework: a 60-day ceasefire extension and a plan to reopen the Strait of Hormuz to normal shipping traffic.
Iran has insisted on two non-negotiable conditions before any deal can move forward. First, full sovereignty over the Strait of Hormuz. Second, an end to Israeli attacks targeting Hezbollah and Palestinian territories.
