Signals of a potential de-escalation between the US and Iran triggered a swift drop in oil prices.
On July 20, according to reports, a mediator in US-Iran negotiations has proposed a 10-day ceasefire to the Iranian side, aiming to ease current tensions and seek a return to implementing the understanding reached last month.
Following this news, Brent crude oil fell by as much as 2.0% intraday to $86.34 per barrel, while WTI crude dropped by up to 2.5% to $79.73 per barrel. US stock futures extended gains, with the Nasdaq 100 index futures rising 1%.
However, these signals of easing tensions do not mask the underlying deadlock, as no fundamental shift has occurred in the Middle East. According to reports, the Iranian presidential office issued a statement on July 20, quoting President Pezeshkian as stating that Iran is currently in a state of "total war."
Qatar Leads Ceasefire Push, Acceptance by Parties Remains Uncertain
An Iranian foreign ministry spokesperson stated that Iran has received proposals from the US-Iran negotiation mediator, though specific details are not yet available for disclosure. The spokesperson added that Iran's interior minister would visit Pakistan for consultations on related matters.
The spokesperson remarked that both negotiation and war are means to achieve objectives, and it is incorrect to claim that "defense and diplomacy cannot proceed in parallel." The spokesperson asserted that Iran has never proactively violated the US-Iran understanding, and that US breaches of commitments led to Iran's countermeasures, with Iranian armed forces responding to the US "with all efforts to stop its crimes."
According to other reports, this ceasefire initiative, led by Qatar, proposes a 10-day halt to strikes by both sides and an end to restrictions on shipping in the Strait of Hormuz. The mediator indicated it remains unclear whether the US and Iran are willing to accept the new ceasefire arrangement, as a preliminary peace deal reached in mid-June broke down earlier this month.
Diplomatic Window Opens Amid Ongoing Military Operations
Despite the resumption of diplomatic efforts, military actions from both sides have continued.
On July 19, a senior US official stated that America remains willing to resolve issues with Iran through diplomatic channels. That same day, the US Central Command announced via social media that it had launched a new round of airstrikes against Iran, marking the ninth consecutive night of US attacks, aimed at "continuing to degrade Iran's military capabilities used to attack commercial and civilian vessels transiting the Strait of Hormuz."
Iran reported that US attacks are ongoing. According to Iranian media, several locations in the southern Iranian city of Bushehr were targeted by US strikes on the morning of July 20. Explosions were also reported in Isfahan, though the exact cause remains unclear.
Iran's Islamic Revolutionary Guard Corps issued a statement on July 20, claiming it had struck multiple US targets within Kuwait. The statement said the IRGC used drones to destroy a US early-warning radar system in Kuwait. In a separate operation, Iran targeted the US Ali Al Salem Air Base in Kuwait, hitting an aircraft parts warehouse and a hangar used for MQ-9 drones, destroying several unmanned aircraft.
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