Trump says Hormuz open as reports point to weaker Iran control

Oman has traditionally provided the most discreet and trusted channel, while Qatar, Pakistan and Turkey have used their relations with both sides to facilitate contacts or transmit messages.

Yet the continuing deadlock in negotiations has now encouraged Washington to widen the diplomatic circle.

In recent days, Austria and Greece have separately opened contacts with Tehran after consultations with US Secretary of State Marco Rubio, according to media reports.

The unexpected involvement of Austria and Greece suggests that European diplomacy, long marginalized in the Iran-US relationship, may be making a cautious return in the context of a regional military escalation.

The sequence of recent contacts is striking. US Secretary of State Marco Rubio met Austrian Foreign Minister Beate Meinl-Reisinger in Washington on August 11 and spoke by telephone with Greek Foreign Minister George Gerapetritis the following day. On August 13, both European ministers held separate conversations with Iranian Foreign Minister Abbas Araghchi. Although the US State Department denied asking them to transmit messages, the timing was probably not coincidental. The State Department subsequently confirmed that Iran had been discussed, while Austria formally offered Vienna as a venue for potential future talks. Greece emphasized freedom of navigation and maritime security in its exchanges with Tehran.

This is not yet formal mediation. Neither Austria nor Greece has the experience, access or accumulated trust that Oman possesses. Their involvement should instead be understood as an exploratory attempt to identify additional channels at a moment when traditional diplomacy is struggling. The proliferation of intermediaries itself is revealing: it demonstrates not the vitality of the diplomatic process, but its fragmentation.

Austria’s possible role is rooted in diplomatic history. Vienna hosted negotiations that culminated in the July 14, 2015 nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA). It is also home to the International Atomic Energy Agency, which would likely play a central role in verifying any future settlement concerning Iranian nuclear activities. Austria can therefore offer more than a neutral meeting room. It provides an institutional environment closely associated with nuclear diplomacy, technical verification and the memory of an agreement that once appeared capable of containing the Iranian nuclear crisis.

Vienna nevertheless carries contradictory symbolism. For Iranian officials, it recalls the JCPOA’s acceptance of limited Iranian enrichment for civilian purposes and the partial lifting of sanctions. But it also evokes the subsequent collapse of the agreement after the first Trump administration withdrew from it in 2018. Austria cannot repair that breach of confidence on its own. Its principal advantage is therefore procedural rather than political: it can provide a discreet and credible setting in which the United States, Iran and the IAEA might clarify their positions.

Greece brings a different form of leverage. As one of the world’s leading maritime nations, it has direct interests in the security of the Strait of Hormuz and the Red Sea. The disruption of navigation through Hormuz is not an abstract geopolitical problem for Athens. It affects Greek-owned shipping, insurance costs, energy prices and the stability of international trade. Greece can consequently address Iran not only as a European Union member and US ally, but also as the representative of an industry directly exposed to the consequences of escalation.

This maritime dimension may make Athens useful in discussions focused on practical arrangements rather than an immediate comprehensive agreement. Measures guaranteeing freedom of navigation, reducing threats against commercial vessels or creating communication mechanisms to prevent incidents at sea could be easier to negotiate than the most divisive nuclear and security questions. Greece could contribute technical knowledge and political advocacy to such discussions, although it lacks the capacity to provide Iran with the sanctions relief or security guarantees Tehran ultimately seeks.

The emergence of Austria and Greece also exposes the decline of the traditional European powers in the Iranian diplomatic arena. France, Germany and the United Kingdom were central to the nuclear negotiations that began in the early 2000s. Since then, however, the credibility of the European trio has deteriorated in Tehran and the three countries are facing bilateral diplomatic crises in their relations with Tehran. Iranian leaders accuse them of failing to protect the economic benefits of the nuclear agreement after the American withdrawal and of increasingly aligning themselves with Washington’s coercive approach. The mutual distrust generated by sanctions, mutual accusations of security “infiltration” and spying, regional conflict and disputes over Iran’s nuclear activities has left little space for the earlier model of European mediation.

This marginalization is being reinforced by the widening security confrontation. The Financial Times reported Wednesday that Iran had considered attacking US military targets in Europe, including in Bulgaria and Cyprus, if Washington further escalated the war.

Reuters reported Wednesday that a NATO official said the alliance was prepared to address any threat and take necessary action to defend its members. The official cited four occasions earlier this year when NATO air defenses intercepted Iranian ballistic missiles heading toward Turkey, saying they demonstrated the strength and effectiveness of NATO’s deterrence and defense posture.

Smaller European countries may therefore benefit from carrying less political baggage. Austria is associated more closely with dialogue than with strategic pressure and maintained substantial economic and energy ties with the Islamic Republic throughout the 1990s and 2000s. Greece, for its part, has generally remained outside the most confrontational debates over Iran. Yet their relative neutrality should not be overstated. Both countries are members of the European Union and close partners of the United States. Tehran will ultimately judge their usefulness by their ability to secure concrete concessions from Washington, not by the cordiality of their diplomatic rhetoric.

Their involvement also reflects the widening international cost of the conflict. The restriction of traffic through Hormuz, a corridor through which roughly one-fifth of global oil consumption normally passes, has transformed the crisis from a bilateral confrontation into a global economic emergency. Washington wants the strait reopened, while Tehran sees control over navigation as one of its most powerful remaining sources of leverage. Austria and Greece are entering the process because the consequences of failure now extend far beyond the Middle East.

The immediate objective should therefore be modest. Vienna and Athens are unlikely to replace Muscat, Doha or Islamabad, and multiplying intermediaries can produce contradictory messages and allow both Iran and the United States to avoid making difficult decisions. Their most useful contribution would be to support a coordinated diplomatic framework: Austria concentrating on nuclear verification and the venue for talks, Greece on maritime security, and traditional regional mediators on political communication and guarantees. Ultimately, no mediator can compensate for a lack of political will to pursue a diplomatic solution rather than military escalation. Austria and Greece cannot make that choice on behalf of Washington and Tehran, but they may help create the conditions in which diplomacy becomes possible.

Their return is therefore neither a diplomatic breakthrough nor an irrelevant gesture. It reflects an increasingly marginalized Europe urgently seeking new ways around a dangerous impasse. If carefully coordinated, these unlikely European channels could help prepare the ground for renewed negotiations. Otherwise, they risk becoming yet another improvised attempt to contain a conflict that its principal actors have so far proved unable to resolve. Europe nevertheless has a strong interest in assuming a more active diplomatic role: European states are already bearing many of the conflict’s economic and security consequences, yet they possess neither the political leverage to shape a settlement nor the military capacity – and, in most cases, the willingness – to impose one.

“I went to three gas stations to fill up and all three were closed,” one Tehran resident told Iran International on Wednesday. “One of them had put up a banner saying, ‘We have no gasoline.’”

Another resident said: “Today I spent about an hour in line for gasoline. Many gas stations had no fuel.”

Another Tehran resident said the Interior Ministry had ordered traffic police to crack down on older cars and motorcycles and impound them.

“They have said these vehicles should remain in impound lots for a month so that fuel consumption can be reduced this way,” the resident said.

The accounts come as Iran faces mounting pressure on fuel supplies, with domestic production struggling to keep pace with demand as a US naval blockade on Iranian maritime traffic disrupts fuel imports that previously helped cover the country’s domestic shortfall.

Esmail Saqab Esfahani, head of Iran’s Energy Efficiency Organization, said Saturday that the country faced a daily gasoline shortfall of around 14 million to 15 million liters.

Hossein Samsami, a member of parliament’s Economic Committee, warned Monday that raising gasoline prices amid current economic pressures could trigger widespread unrest, likening it to “a spark in a powder keg.”

Iranian officials have grown increasingly concerned about the prospect of renewed protests, while seeking to cast public discontent as being fueled by foreign adversaries.

Parliament Speaker Mohammad-Bagher Ghalibaf said Tuesday that the enemy was seeking “riots, assassinations and separatist activities” and intended to “exploit” any potential dissatisfaction over gasoline.

Concerns over methanol-blended gasoline

Plans to blend methanol into gasoline have also raised concern among Iranians, with locals telling Iran International they were uneasy about the fuel’s safety and its potential impact on vehicles and public health.

The concerns come against a backdrop of longstanding questions over fuel quality in Iran and previous reports that authorities used non-standard chemical compounds to help offset gasoline shortages.

Vahid Ghanei-Fard, CEO of the Persian Gulf Star Refinery, Iran’s largest gasoline producer, said Tuesday that a pilot project to produce methanol-based gasoline had been successful, with methanol accounting for 3% of the blend.

He said the fuel met “national and international standards” and that the use of methanol had helped raise the refinery’s daily gasoline output to around 49 million liters.

Saadatollah Molavi, an Iran-based refinery expert and frequent energy commentator, told IMNA, an Isfahan municipality-affiliated news agency, that methanol could play a role in easing Iran’s fuel shortage.

But Molavi warned against treating it as a long-term solution without assessing costs, efficiency, gas consumption and infrastructure needs, suggesting the blend may offer only a temporary fix rather than a sustainable answer to Iran’s fuel deficit.

Last May, the London-based independent research group Iran Open Data reported in May 2025, citing a confidential Oil Ministry document, that authorities had used hazardous and contaminated chemical compounds outside the conventional refining process to increase gasoline supplies.

The report described the practice as widespread and systematic and said it was aimed at compensating for the country’s gasoline shortfall.

Concerns over the quality of Iran’s gasoline are longstanding. In January 2023, Dariush Golalizadeh, an official with the Department of Environment, said only 38% of gasoline produced in the country met Euro 4 and Euro 5 standards.

President Donald Trump said he did not expect Iran to agree to the kind of deal he considered necessary and again made preventing Tehran from obtaining a nuclear weapon the central US demand.

“They’re not going to make the kind of a deal that I feel is necessary,” Trump said Monday. “Iran cannot have a nuclear weapon. And they won’t have a nuclear weapon.”

Asked whether Washington wanted to extend the interim agreement, Trump replied: “No.”

He also said the United States had “total control” over the Strait of Hormuz through its naval blockade.

Tehran disputes 60-day deadline

Foreign Ministry spokesperson Esmaeil Baghaei disputed the characterization of Monday as the expiry of the memorandum itself, although the text of the agreement says the two sides committed to achieving a final deal within a maximum of 60 days, extendable by mutual consent.

Baghaei insisted that the 60-day period linked to the Islamabad memorandum had been intended for negotiations and was no longer relevant because Washington had breached the agreement.

He said the memorandum contained no formal 60-day deadline and that Iran would not make decisions in response to ultimatums.

Foreign Minister Abbas Araghchi had said Friday that the memorandum referred to an “end to the war,” rather than a 60-day ceasefire requiring an extension.

Iran gives US ‘a few weeks’

A senior Iranian official told Reuters that Iran had set a period of “a few weeks” for Washington to fully implement the memorandum before further negotiations could take place.

“Within the short period of a few weeks set by Iran, all the agreement’s provisions must be implemented by the US. This is a precondition for further negotiations with the US,” the official said.

Reuters reported, citing the official, that Iran had adopted a “fully offensive” posture and would be prepared to escalate in the Strait of Hormuz and across the region if diplomacy failed.

The official said Tehran’s timeframe would be conveyed to Washington and regional governments through mediators.

Contacts continue without agreement

Trump also confirmed that his administration had established a direct backchannel with the Revolutionary Guards and said he was “not in a hurry” to end the war. The IRGC later denied that talks with US officials were under way.

Trump envoy Jared Kushner said later Monday that US conversations with different parts of the Iranian government were probably “more robust than ever,” but that the two sides had yet to reach an understanding.

Oil prices also rose Monday as investors grew more pessimistic about efforts to end the Iran war and shipping through the Strait of Hormuz remained constrained.

WTI settled 2.5% higher at $84.50 a barrel, while Brent rose 2.7% to $90.87, the Wall Street Journal reported. Gains accelerated after Iranian state media reported that an Emirati oil tanker had been seized in the strait.

Qatar’s Foreign Ministry spokesperson Majed Al Ansari said in a post on X that Doha was “surprised by these misleading statements” amid ongoing diplomatic efforts to de-escalate regional tensions.

The denial came after Mohammad Bagherzadeh, commander of the Iranian Armed Forces General Staff’s committee for missing personnel, said three pilots had been captured alive and held by Qatar for about six months.

Bagherzadeh identified the pilots as Javad Salehi, Abdolmajid Dashtian and Omran Beh-Raveshian in a letter to the International Committee of the Red Cross published by IRGC-affiliated Fars News Agency.

Al Ansari said Qatari forces established contact with the Iranian pilots after they violated Qatar’s airspace and their targeting trajectory had been confirmed.

He said the pilots failed to respond to attempts to communicate and that Qatar then took “the necessary measures” to defend its territory in accordance with international law and its rules of engagement.

Qatar’s Defense Ministry said in March that two Iranian Su-24 aircraft had been shot down during an operation that reportedly targeted Al Udeid Air Base, which hosts US troops.

CNN reported at the time, citing two sources briefed on the operation, that Qatari forces warned the Iranian jets by radio but received no response before a Qatari F-15 engaged them and shot them down.

Qatar says one pilot’s remains were recovered

Al Ansari said Qatari search-and-rescue teams subsequently searched for the pilots’ remains.

He said Qatar coordinated with Iran to hand over the remains of one pilot who was found and invited an Iranian team in April to visit Qatar and review details of the search-and-rescue operation.

Al Ansari said Tehran had yet to respond to the invitation.

Iranian officials had previously said the fate of the three pilots remained unclear. Earlier this month, a senior Iranian Air Force official said authorities still lacked definitive information about them.

The dispute comes as Qatar remains involved in mediation between Tehran and Washington, with Al Ansari pointing to ongoing diplomatic efforts to reduce regional tensions.

Trade with China has fallen to roughly a quarter of last year’s level by one measure, while commerce with Turkey, India and the European Union has also contracted sharply as war and disruption in the Strait of Hormuz reshape Iran’s foreign trade.

Mohammad-Sadegh Ghanadzadeh, a senior official at Iran’s Trade Promotion Organization, said both non-oil exports and imports fell by roughly 30% during the first four months of the current fiscal year, from March 21 to July 22.

The government has stopped regularly publishing detailed foreign trade statistics since the war began, making a fuller assessment difficult.

Iranian customs data show the country recorded slightly more than $34 billion in non-oil trade during the same four-month period last year, including $15 billion in exports.

China trade plunges

China is Iran’s largest trading partner, accounting for roughly one-third of the country’s non-oil foreign trade.

Chinese data put non-oil bilateral trade at around $10 billion in 2025—substantially lower than Iranian figures, in part because the two countries classify and record parts of their trade differently, including sanctioned Iranian commodities.

According to Chinese customs records, trade with Iran totaled less than $823 million during the first four months of the war, from March through June. That is roughly one-quarter of the level recorded during the same period a year earlier.

The disruption has also sharply increased transportation costs.

Majidreza Hariri, chairman of the Iran-China Chamber of Commerce, said transporting goods from China to Iran by sea or land now costs four times as much as before the war, with shipping a container costing as much as $13,000.

Major partners hit harder

Trade with several of Iran’s other major partners has also contracted sharply.

The United Arab Emirates, Iran’s second-largest trading partner, has largely halted trade with Tehran. Before the war, annual trade between Iran and the UAE stood at around $27 billion, about 80% of it Emirati exports to Iran.

The precise impact on trade with Iraq, Iran’s third-largest trading partner, remains unclear. But official data from Turkey, its fourth largest, show Turkish exports to Iran fell by almost half between March and June to around $716 million, while imports from Iran dropped 37% to $907 million.

India has recorded a similar decline. Its exports to Iran fell by around 60% during the first four months of the war to approximately $150 million.

Indian imports from Iran moved sharply in the opposite direction, reaching around $1 billion in the first half of the year — four times the level recorded during the same period last year—after India bought several shipments of Iranian crude oil and liquefied petroleum gas.

Health Minister Mohammad-Reza Zafarghandi recently said India, Iran’s largest supplier of pharmaceutical raw materials, had stopped shipments after the IRGC closed the Strait of Hormuz.

He said India had made the resumption of pharmaceutical exports conditional on free passage for Indian vessels through the waterway.

Where has the trade gone?

Taken together, available data suggest Iran’s trade with several of its largest established partners has contracted substantially more than the 30% overall decline reported by Tehran.

The discrepancy suggests commerce with other countries may have partly cushioned those losses.

Russia, Pakistan, Iraq, Afghanistan and Central Asian states are among the possible destinations, though the absence of regularly published Iranian customs figures makes it difficult to establish how much trade has shifted or where.

The broader picture nevertheless shows the economic fallout from the war extending well beyond Iran’s oil exports, weakening some of Tehran’s most important commercial relationships even as the full extent of the shift remains obscured by the lack of detailed Iranian data.