Oil rally hardens Tehran's stance on US talks

The shift comes as Brent crude climbed above $100 a barrel for the first time in two months after Iran-aligned Houthi attacks expanded maritime tensions from the Strait of Hormuz to the Bab al-Mandab Strait, raising fears of broader disruption to Middle Eastern energy exports.

US President Donald Trump this week warned that the United States would destroy Iranian bridges or power plants in response to attacks on shipping in the Strait of Hormuz.

He later blamed Tehran for Houthi attacks on commercial vessels in the Red Sea, saying any further assaults would trigger an "extremely severe" US response against both the Houthis and Iran.

Amid the escalating threats, Brent crude surged 6% on Thursday, climbing back above $100 a barrel for the first time in two months.

Tehran sees leverage

Iranian officials increasingly portrayed the price rally as evidence that insecurity around the Strait of Hormuz and the Bab al-Mandab had strengthened Tehran's negotiating position.

"The equation of this war is clear: either everyone or no one," Parliament Speaker and Iran's chief negotiator Mohammad-Bagher Ghalibaf wrote on X. "In a region where we cannot sell oil, no one will sell oil. If our security is not guaranteed, no infrastructure will remain safe."

He later added: "They wanted to punish Iran. Punished themselves with triple-digit oil instead."

Mohammad Mokhber, an adviser to Supreme Leader Mojtaba Khamenei, argued that the latest rally reflected disruptions to transportation rather than production, implying prices could climb much higher if energy infrastructure itself came under attack.

"Oil at $100 is, so far, merely the result of disruptions in transportation, not production. The fire the United States is igniting in the region's oil and gas fields will eventually engulf the entire world."

Ali Akbar Velayati, another senior adviser to Mojtaba Khamenei, likewise warned that "the illusion of striking Iran at low cost" could have consequences extending well beyond the battlefield to global energy markets.

Talks lose momentum

The more confident tone in Tehran coincided with signs that diplomacy was stalling.

According to Axios, citing two regional sources familiar with mediation efforts, Iran's leadership rejected the latest proposal presented through intermediaries.

"We're trying, but the Iranians are not cooperating," one source told the outlet.

Trump also acknowledged that negotiations had made little progress, saying Tehran wanted to negotiate but had not "suffered enough yet."

Conservative Iranian media and hardline commentators argued that soaring oil prices had renewed Washington's interest in diplomacy and urged Tehran to resist returning to the negotiating table while economic pressure on the United States and its partners continued to build.

Following its announcement of attacks on US facilities in Kuwait, the Islamic Revolutionary Guard Corps (IRGC) declared that Washington "must pay the price for breaking its commitments" and vowed not to allow the United States to use "deceptive ceasefires" to replenish military supplies and strategic reserves before resuming hostilities.

The statement accused Washington of seeking negotiations only after being "defeated on the battlefield."

Hardline commentator Hamid Moghaddam similarly argued that renewed American interest in diplomacy reflected the surge in oil prices and urged Iranian negotiators to hold their position.

Another hardline commentator wrote that unless households in the West began to feel the economic consequences of the conflict, the United States and Israel "would have no hesitation in turning Iran into another Libya or Gaza."

Former Israeli intelligence officer Danny Citrinowicz questioned whether Trump's increasingly forceful warnings would alter Tehran's calculations.

"The Houthis are not going to stop attacking, just as Iran is not going to stop supporting them," he said.

"These threats are unlikely to change behavior in either Sana'a or Tehran. If anything, repeated ultimatums that are not enforced risk highlighting the limits of American deterrence."

The debate gained fresh momentum after Trump warned Tuesday that the United States would target the deeply buried facility, known in Persian as Mount Kolang Gaz La, if Iran sought to restore its nuclear program there.

Advocates of this view argue that the recent wars demonstrated that conventional military capabilities alone no longer provide sufficient deterrence, making a nuclear option increasingly necessary. Others stop short of openly advocating nuclear weapons but argue that Iran should at least leave the NPT in response to growing US threats.

The arguments echo comments made by Fereydoun Abbasi, the former head of the Atomic Energy Organization of Iran and a politician closely associated with Saeed Jalili’s hardline camp, months before he was killed in Israeli strikes during the 12-day war in June 2025.

In January 2025, Abbasi argued that under the new security environment, “the dangers of not building a bomb and lacking strong deterrence are far greater than the costs of acquiring it,” warning that weak deterrence would only encourage direct aggression.

Abbasi also maintained that Iran had long ago crossed the scientific and technical threshold required to build a nuclear weapon, arguing that the remaining obstacle was no longer technical but rather “a strategic decision.”

In his view, when threats from Israel and its allies become existential, missile deterrence and reliance on regional allies are no longer sufficient, leaving the country increasingly vulnerable without a nuclear deterrent.

Social media campaign targets negotiating officials

Many hardline social media users now argue that Iran should build a nuclear bomb as quickly as possible. They have also criticized officials they describe as “eager for negotiations”—including President Masoud Pezeshkian, Parliament Speaker Mohammad-Bagher Ghalibaf and Foreign Minister Abbas Araghchi—for failing to put withdrawal from the NPT on the government’s agenda.

One X user writing under the name Ayyar reacted to Foreign Ministry spokesman Esmaeil Baghaei’s statement that Iran remained committed to the NPT.

“Just hours after Baghaei declared that Iran is still a member of the NPT, Trump threatened to bomb the Pickaxe Mountain nuclear facility,” the user wrote. “They killed the country’s leader along with thousands of Iranians and repeatedly struck our nuclear facilities. What exactly must the enemy do before we leave the NPT? Are you asleep?”

Another user, writing under the name Sam, argued: “Why are we afraid of leaving the NPT? Afraid of a global consensus against Iran? Staying in the treaty hasn’t prevented that. We have no choice but to build nuclear weapons for comprehensive deterrence. Nuclear weapons could be the final answer.”

Another account, Seyed Mehrdad, wrote: “The answer to a nuclear threat is not threatening regional infrastructure. Deterrence lies in leaving the NPT and conducting a live nuclear test.”

Other users argued that Iran should not remain without nuclear weapons if countries such as Turkey or Saudi Arabia eventually acquire them, insisting that “missile power alone cannot guarantee deterrence.”

Another post claimed that nuclear-capable bombers would not threaten Iran if the country already possessed nuclear weapons, reflecting a broader argument among hardliners that only an atomic arsenal could prevent further US or Israeli attacks.

Debate spreads beyond social media

The discussion has also spread into conservative media. On June 28, the IRGC-affiliated Fars News Agency published an opinion piece titled “There Is No Alternative but to Build an Atomic Bomb,” arguing that Iran required nuclear deterrence to secure the “peace of mind” necessary to resolve other disputes through negotiations.

Fars later clarified that the article had appeared in its interactive opinion section and did not represent the agency’s official editorial position.

Other conservative outlets, including Kayhan, and hardline members of parliament have generally avoided explicitly endorsing nuclear weapons. They have, however, increasingly referred to concepts such as “redefining deterrence,” “reviewing nuclear commitments” and “revising the country’s defense doctrine.”

Calls for NPT withdrawal intensify

Trump’s latest warning against Pickaxe Mountain has also prompted some conservative figures to publicly raise the possibility of leaving the NPT.

Political analyst Mohammad Hossein Khoshvaght, who has close ties to the late supreme leader’s family, questioned whether conventional responses to US attacks would simply encourage further aggression, asking whether such a cycle could continue “until Iran is brought down.”

Former senior Revolutionary Guards commander Ghorbanali Salavatian urged Iranian authorities to formally notify international organizations that Iran would withdraw from the NPT if the United States attacked Pickaxe Mountain.

He added that such a withdrawal should occur “without delay” if an attack took place.

Khamenei’s fatwa returns to focus

The debate has also reopened questions surrounding the religious prohibition on nuclear weapons issued by the late Supreme Leader Ali Khamenei.

Following Khamenei’s death, some social media users argued that Mojtaba Khamenei, as the new supreme leader, should revoke or revise his father’s fatwa declaring nuclear weapons religiously forbidden in light of the changed security environment.

One user wrote in March that because Ali Khamenei was no longer a living source of emulation, his fatwa was no longer binding. The user described the pursuit of nuclear deterrence as “a national demand and the right of the Iranian people.”

The issue had already surfaced in September 2025, when 70 members of parliament argued that Khamenei’s previous ruling should be changed or reinterpreted and demanded authorization for the development and possession of an atomic bomb to establish “nuclear deterrence.”

The lawmakers argued that while the use of nuclear weapons could remain religiously forbidden, producing and possessing them solely for deterrence should be treated differently.

Official position remains unchanged

Before Ali Khamenei’s death, Iranian officials and nuclear negotiators consistently maintained that his fatwa was a permanent religious ruling rather than a temporary political decision.

According to their interpretation, not only the production and use of nuclear weapons but even their possession solely for deterrence is forbidden under Islamic law. They argued that Iran’s deterrence should instead rest on missile capabilities, technological advances and human capital.

Under Shiite jurisprudence, however, a new marja, or source of emulation, may issue rulings that differ from those of his predecessors.

Araghchi acknowledged this possibility in an interview with Al Jazeera in April, saying any change to the nuclear fatwa would depend on the position adopted by Iran’s new supreme leader.

For now, the government’s formal position remains unchanged. Baghaei said Monday that Iran remained a member of the NPT and recognized its obligations under the treaty, although he added that Tehran continually reviewed its foreign policy and national security options.

Baghaei also said Wednesday that no nuclear activity was taking place at Pickaxe Mountain, accusing Washington of using the site as a “fabricated pretext” for further attacks and sabotage.

The unusually candid warnings came at a two-day economic conference in Tehran that brought together senior economists, policymakers and business leaders after being postponed three times because of regional instability and wartime conditions.

Speakers said the latest escalation with Washington had transformed discussions from long-term reform into managing an economy under renewed military pressure.

Former presidential adviser Masoud Nili delivered one of the starkest assessments, warning that Iran's economy was moving from a chronic but manageable malaise into an active crisis.

Years of structural mismanagement, he said, were now visibly breaking open, while inflation had entered a "more slippery phase" in which subsidies and social safety nets were no longer sufficient to protect household welfare.

Media coverage reflected the divide between government officials seeking to reassure the public and independent economists warning that structural weaknesses were becoming harder to ignore.

Economic daily Donya-ye-Eghtesad listed chronic inflation, weak and unstable growth, persistent budget deficits, foreign-exchange volatility, dual exchange rates, pension-fund insolvency, foreign-policy pressures and rising geopolitical risks among the country's most urgent challenges.

Economist Mehrdad Sepahvand, one of the conference organizers, said the event had been delayed three times because of the regional crisis.

Investment gap

Former Central Bank Governor Hossein Abdoh Tabrizi argued that banking reform was essential, saying financial institutions must become "efficient allocators of capital rather than money-printing engines."

Although public confidence in the banking system had held up during recent regional conflict, he said, deeper reforms were needed to channel savings into productive investment.

Economist Mohammad-Mehdi Behkish said rebuilding damaged infrastructure, restoring economic growth and modernizing industry would require about $500 billion in investment.

Domestic resources alone were nowhere near sufficient, he argued, making greater foreign engagement and integration into the global economy indispensable.

Alireza Bakhtiari, director of the Donya-ye-Eghtesad Media Group, said policymakers remained trapped between what he described as a "survival paradigm" and a "growth paradigm," arguing that many of Iran's domestic economic constraints could not be resolved without major foreign-policy decisions.

Government response

Government-linked outlets focused instead on Central Bank Governor Abdolnaser Hemmati, who acknowledged the severity of the economic situation while urging against panic.

Hemmati cited Iranian and international data showing a 47 percent decline in real per-capita income, saying the purchasing power of the average Iranian had fallen to levels last seen in the late 1990s.

Calling for "realism without doom-mongering," he argued that neither denial nor exaggeration would improve the economy.

"Price stability alone doesn't create goods," he said. "Only investment and productivity can sustainably restore Iranians' purchasing power."

Inflation pressures

Independent economists painted an even darker picture.

Hossein Tavakolian warned that inflation was entering a more dangerous phase.

Monthly inflation, once around 3 percent and equivalent to roughly 40 percent annually, was now periodically reaching 10 percent, he said, with nearly every major consumer category entering what he described as "red zones."

Academic economist Teymour Rahmani argued that inflation in Iran was fundamentally a political and fiscal problem rather than simply a monetary one.

Although direct government borrowing from the central bank had been curtailed, he said, fiscal pressures had merely shifted onto commercial banks, postponing rather than solving the country's inflation problem.

Pakistan and Qatar urged Tehran and Washington on Monday to halt hostilities and resume implementation of a previously signed memorandum of understanding.

Iranian Interior Minister Eskandar Momeni traveled to Islamabad on Monday carrying a message from President Masoud Pezeshkian as part of the mediation effort. Regional media reported he was also expected to meet Pakistan's army chief, Field Marshal Asim Munir.

According to Israel's Channel 14, Qatar proposed that the United States suspend further military strikes while Iran reopens both the northern and southern shipping lanes through the Strait of Hormuz for a 10-day period. The proposal has not been independently verified.

Tehran confirms new proposals

Foreign Ministry spokesman Esmail Baghaei confirmed during his weekly press briefing that Iran had received new proposals from mediators aimed at ending the confrontation, although he did not disclose their contents.

His remarks marked Tehran's first public acknowledgment that fresh diplomatic initiatives were under consideration following the latest escalation.

President Masoud Pezeshkian also defended both the memorandum of understanding and the prospect of diplomacy during remarks to the Supreme Judicial Council, rejecting accusations that Iran had compromised its national interests.

"Not only was no concession made against the country's interests, but Iran achieved major gains, and there is not a single provision that creates a one-sided benefit for the United States," he said.

"If economic pressure leads to growing social discontent, the tremendous social capital that people have created in support of the system could be damaged."

Political analyst Hossein Ghatib argued that diplomacy should remain an option despite the fighting, but warned against any temporary ceasefire that merely postponed another round of conflict.

"The next agreement should not be based on concessions before guarantees," he wrote on X. "Instead, it should rest on the principles of guarantees before concessions, verification before trust, and concrete action before the next step."

Fighting continues

The diplomatic activity unfolded against a widening military campaign across Iran and the Gulf.

Iran launched additional missile and drone attacks targeting Kuwait and Bahrain, while a Greek shipping company said two tankers under its management had been struck by unidentified projectiles while transiting Omani coastal waters.

Iranian media also reported attacks in East Azerbaijan, West Azerbaijan and Bushehr provinces, followed later in the day by a strike on the Shiraz Electronics Industries complex.

Iranian Army spokesman Mohammad Akraminia said "reason dictates that the war continue until it creates complete deterrence for Iran."

He also warned that "any country cooperating with the Americans will certainly face problems for its ships passing through the Strait of Hormuz."

Parliament Presidium member Rouhollah Motefakker-Azad similarly warned that if the conflict continued, "the Islamic Republic will respond even more aggressively, and then the Americans should think more seriously and more quickly about leaving the region."

‘Pointless domestic divide’

Iranian hardliners nevertheless continued to oppose any return to negotiations.

Conservative political analyst Majid Shakeri argued that Washington should first publicly recommit to the memorandum of understanding and fulfill its obligations under the agreement before any new talks could begin.

Commenters on the conservative Tabnak website likewise dismissed renewed diplomacy, with one describing the situation as a "vicious cycle of war, negotiations, war, negotiations."

The IRGC-affiliated Javan newspaper, however, argued that Iran should remain prepared for either outcome.

"Going to the negotiating table to consolidate the gains achieved in the war and secure lasting security, or continuing to fight for the same objective, should not create a pointless domestic divide."

On the US side, President Donald Trump reposted a Truth Social poll showing majority support among respondents for a peace agreement with Iran while insisting Washington had responded forcefully to the killing of American personnel.

Secretary of State Marco Rubio also reiterated that the United States remained committed to a diplomatic solution despite the ongoing fighting.

"They continue sending signals that they want talks and negotiations," Rubio said. "But we respond to their actions, and their actions are firing missiles and drones at ships."

The debate has intensified since Iran targeted a vessel near the Strait of Hormuz last week, prompting a renewed US military campaign that has included days of strikes on ports, bridges, airports and military facilities across Iran’s southern provinces.

Even as US Vice President JD Vance and Iranian Parliament Speaker and chief negotiator Mohammad-Bagher Ghalibaf have continued to defend diplomacy backed by military preparedness, the fighting has persisted and the prospect of a wider conflict has grown.

The criticism has been directed in part at ultrahardline figures such as Qom Seminary Chancellor Alireza Arafi, who has called for further war against the United States and an end to negotiations.

Two recent commentaries—one by former lawmaker and former National Security Committee chairman Heshmatollah Falahatpisheh, the other by political analyst Abdolrahman Fathollahi—reflect the growing push to hold hardliners accountable for the costs of confrontation.

While one focuses on political responsibility for failed diplomacy, the other highlights the burden borne by communities on Iran’s southern frontier.

‘Defeating diplomacy’

Writing in the moderate daily Toseh Irani, Falahatpisheh accused hardline factions of using what he called a distorted interpretation of religion to obstruct diplomatic opportunities.

“I believe part of these two major wars against Iran was the result of this very definition of religious beliefs by extremists, who are now turning to distorting religion to defeat diplomacy,” he wrote.

He argued that the same factions had repeatedly promised better outcomes while blocking agreements that could have reduced tensions.

“They are the exact same people who blocked two good agreements during the major periods of 2021 and 2022, claiming they would forge a better deal,” he wrote. “But in practice, not only was no agreement achieved, but two major wars were imposed on Iran.”

Falahatpisheh called for the prosecution of those he said had turned diplomatic opportunities into military conflict.

‘Patriotism from a safe distance’

A second commentary, published Thursday in Shargh, shifted the focus from political responsibility to the human cost of confrontation.

Under the title The Country’s Future and the Triangle of Extremism, Costs, and Responsibility, Fathollahi warned about the toll of intensifying US airstrikes on Iran’s southern coastal provinces.

He pointed to public campaigns calling for outspoken opponents of negotiations to be sent to the front lines, accusing them of practising what he described as “patriotism from a safe distance.”

“One certainly cannot beat the drums of war from the safe margins of the capital behind podiums, while dumping the costs of those decisions onto the people living in the front lines,” Fathollahi wrote, highlighting the plight of communities bearing the brunt of the fighting over the Strait of Hormuz.

The comments come after a week of US strikes on infrastructure across Iran’s Persian Gulf provinces, where dozens have been killed or injured and many more affected by transport disruption, electricity blackouts and water shortages during the height of summer.

For Fathollahi, the question is no longer simply one of military strategy but whether Iran’s leaders are willing to change course before the costs grow even higher.

“Rethinking certain political approaches and utilizing all expert and diplomatic capacities is not a choice,” he concluded, “but a necessity to safeguard national interests and reduce the costs imposed on society.”