Iran rejects new ceasefire, demands permanent end to conflict as Hormuz standoff drives oil prices higher

Iran is rejecting another temporary ceasefire with the US and is instead demanding a "permanent end" to the conflict, according to Iranian officials and analysts monitoring the stalled diplomacy.

The 60-day period associated with the Iran-US interim peace deal ended without a breakthrough.

Washington, in turn, also rejected an extension while a senior Iranian official said the US had a few weeks to meet the agreement’s terms before further talks.

The Islamabad Memorandum of Understanding (MoU), signed June 17 by US President Donald Trump and Iranian President Masoud Pezeshkian, called for an immediate halt to military operations and set a 60-day window to negotiate a final settlement covering the Strait of Hormuz, Iran’s nuclear programme and sanctions.

That period ended Monday (Aug. 17) with both sides accusing each other of violations and no extension agreed.

Iranian Foreign Minister Abbas Araghchi has described the document as representing “the end of the war, not a ceasefire,” and said Tehran has not decided to restart direct negotiations.

Parliament Speaker Mohammad Bagher Ghalibaf, Iran’s lead negotiator, told lawmakers Tuesday that the Strait of Hormuz will remain closed until the US lifts its naval blockade of Iranian ports, remove oil sanctions, release frozen assets and end military threats.

Ghalibaf also said Washington’s increased pressure would not force Tehran to accept demands beyond the Islamabad Memorandum of Understanding (MoU).

In a post on his X account on Tuesday, Ghalibaf said the US appeared to believe that “squeezing Iran harder will win concessions that were never part of the agreement.”

He also dismissed the ability of US Treasury Secretary Scott Bessent and War Secretary Pete Hegseth to deliver such an outcome, saying the two officials are “way out of their league.”

“Stop waiting for the clown crew to pull a rabbit out of their hat and clean up the mess you made,” Qalibaf added.

Trump, meanwhile, said Tuesday there are “no talks or conversations going on, or scheduled” with Iran.

He maintained that the US naval blockade remains in force and that the strait is "open", contradicting Tehran’s position.

The interim deal quickly frayed after its signing.

Trump declared it “over” in early July after attacks on ships taking the Oman route blamed on the IRGC, while Iran suspended it days later.

Fighting has continued at a lower intensity, with disruptions to shipping through Hormuz and the Bab al-Mandab strait driving up global oil prices and prompting major tanker operators to avoid the waterways.

Analysts say the positions leave little room for immediate diplomacy.

Iran appears unwilling to accept another temporary pause that it believes would allow the US and its allies to regroup.

Washington, for its part, appears to be seeking greater leverage — potentially through tighter economic pressure or reinforced blockades — before engaging on a permanent settlement.

The White House's recent public releases contain no announcement of a new high-level diplomatic meeting, a "low-keying" strategy, while its latest Iran-related messaging continues to emphasise "maximum pressure" on Tehran.

The Trump administration's broader policy remains grounded in economic and strategic pressure. It views Tehran's policies as continuing to pose an “unusual and extraordinary threat” to US national security, foreign policy and the economy, while reaffirming sanctions as an instrument for applying financial pressure on Tehran.

The standoff continues to have consequences for energy markets and regional security.

Brent crude settled at $91.02 a barrel early on Wednesday (Aug. 19, as of 8.06am Tokyo time), its highest level in more than three weeks.