Tehran political circles see US hand in postponement of Oman Hormuz talks

Kayhan on the hard right, and Shargh and Donya-ye Eghtesad on the pragmatic and pro-reform side of the divide, all reported that the talks in Oman had effectively broken down, leaving Tehran without an immediate way out and its economy exposed to worsening inflation, shortages and a lurching currency.

The meeting had been meant to give Iran a diplomatic opening. Foreign Minister Abbas Araghchi was due to present maps for a "managed transit corridor" through the Strait of Hormuz, and to seek regional endorsement of an Iran-Oman "phased framework," a temporary joint corridor and mine-clearance plan.

It did not happen. Fars News, affiliated with the Revolutionary Guards, reported that the postponement had been a joint decision by Tehran and Muscat, taken at the request of unnamed "certain regional countries."

Behind that phrasing sat a refusal. Saudi Arabia and Bahrain did not attend, and the Arab monarchies of the Persian Gulf declined to endorse Iran's transit proposal. They were being asked to back a plan for safe passage through Hormuz at a moment when Iran-aligned Houthi forces were expanding strikes on Saudi Arabia's East-West pipeline and fortifying coastal artillery at Bab el-Mandeb after taking the port of Mokha.

Washington's position was its own obstacle. It rejected treating the shipping question in isolation, insisting any transit arrangement be tied to broader nuclear concessions. Tehran's answer was that normal shipping requires an immediate halt to US tanker interdictions and the release of $24 billion in frozen Iranian assets under the Islamabad framework. Neither side moved.

The argument in Tehran

With the diplomatic route stalled, the argument inside Iran has turned to force, and the failure in Oman has sharpened it.

Kayhan, other Guards-aligned outlets and figures in the ultraconservative Paydari Front are pressing to abandon proportional retaliation altogether and to strike all Western-aligned shipping if a single Iranian vessel is hit.

They have paired this with a push to treat calls for referendums or ceasefires as treason, to cast economic hardship as an ideological duty, and to demand full withdrawal from the Non-Proliferation Treaty after the IAEA referred Iran to the UN Security Council.

Reformist and moderate figures in the administration argue instead for keeping the channels through Qatar and Oman open and putting economic survival first. But this is a dispute over method, not over the system either camp is defending: one faction would answer the blockade with escalation across the Persian Gulf and Red Sea, the other fears that combining a naval blockade abroad with intensified repression at home would leave Iran isolated on both fronts at once.

That repression is already visible. Police and the Revolutionary Guards have increased street patrols and moved additional forces into Tehran and Isfahan ahead of the anniversary of the 2022 Woman, Life, Freedom protests, which began in mid-September.

The economy behind the argument

The deadlock feeds directly into the crisis that produced the talks in the first place.

Point-to-point inflation is nearing 90 percent, and on the open market the rial is at 2.3 million to the dollar. Against a minimum monthly wage now worth about $72, the volatility alone makes household budgeting impossible.

The sharpest damage is in medicine. Container backlogs at Bandar Abbas, Iran's main southern port, have choked domestic pharmaceutical production and caused acute shortages of essential drugs. Out-of-pocket medical costs have more than doubled, pushing low-income households to abandon treatment. In call-ins to Persian-language television abroad, viewers have described selling household belongings to pay for care.

The government's own remedies have added to the strain. It has raised petrol prices and drawn on the central bank's foreign currency reserves, steps that have deepened the erosion of public trust rather than eased it.

The postponement, then, does more than delay a meeting. It removes Tehran's nearest diplomatic exit at a moment when the hardline factions are pressing for wider retaliation across the Persian Gulf and the Red Sea, and when the economy can least absorb what that would cost. Whatever Iran's rival camps decide, it is private businesses and urban households that will carry it.

Only four commodity vessels crossed Hormuz on Monday, down from 10 on Sunday, Reuters reported, citing preliminary Kpler data. Two dry-bulk carriers exited, one carrying cargo and the other empty, while two empty oil tankers entered. The figures exclude ships that may have crossed with their tracking transponders switched off. TankerTrackers separately said two-way daytime traffic by very large crude carriers was continuing.

The dangers facing shipping were illustrated by the Panama-flagged tanker Elgaia, which Oman’s Maritime Security Center said was being towed to port after catching fire following an earlier attack.

An Omani naval vessel evacuated 23 crew members and arranged medical care, while searches continued for two missing people. The incident occurred about 1.3 nautical miles northeast of Musandam governorate. The statement did not identify an attacker.

Pressure also intensified around Bab el-Mandeb, the southern gateway to the Red Sea. Commodity-vessel transits there fell to 21 on Monday from 28 the previous day. France requested a UN Security Council meeting on the crisis for Tuesday afternoon in New York, Reuters reported, citing French diplomats.

Turkey’s Foreign Minister Hakan Fidan said reciprocal attacks in the Persian Gulf were undermining efforts to end the war and must stop immediately. Speaking in Baku, he called for freedom of passage through Hormuz and restoration of the situation before the war, saying Ankara was in contact with all parties.

Pakistan and the UN nuclear watchdog also backed a diplomatic route. Foreign Minister Ishaq Dar and IAEA chief Rafael Grossi agreed that implementing the Islamabad memorandum of understanding between Iran and the United States remained the best way to defuse tensions, Pakistan’s Foreign Ministry said. Grossi offered technical assistance if needed.

Saudi attacks and US war costs
The Saudi-led coalition said Houthi ballistic missiles and drones struck civilian targets in Khamis Mushait, Abha and Taif on Monday, injuring 13 people.

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  Xi’s BRICS peace call sparks debate in Iran over China’s role in war

Coalition spokesperson Major General Turki al-Malki said the injuries ranged from minor to moderate and that seven homes and two vehicles were damaged. He said the coalition would respond “responsibly and firmly” and take measures to deter further attacks.

Saudi Arabia’s Civil Defense issued new emergency alerts in Abha and Khamis Mushait on Tuesday before announcing shortly afterward that the danger had passed in both locations. Authorities did not disclose the nature of the threats.

Yemeni government aircraft, meanwhile, targeted Houthi weapons depots in Al-Jubah and below Mount Haylan in Marib province, Al Arabiya reported. Government forces also thwarted an attempted Houthi infiltration in Harib, south of Marib, according to the report.

The UN Security Council was scheduled to meet Tuesday afternoon in New York to discuss the deteriorating situation around the Bab el-Mandeb Strait. France requested the meeting, two French diplomats told Reuters.

A US Defense Department inspector general report showed the scale of the conflict’s cost to Washington. The report estimated that the war had cost the United States about $33.4 billion through June 29 and had produced shortages of strategic munitions and exposed bottlenecks in the US defense industrial base.

The total included $22.3 billion in expended munitions, $3.7 billion in equipment losses and $7.4 billion in cumulative obligations, excluding repairs to military infrastructure.

US Central Command said that Iranian strikes damaged or destroyed hundreds of buildings and structures at US bases in Kuwait, Bahrain, Qatar, the United Arab Emirates, Saudi Arabia, Iraq, Oman and Jordan. Dozens of US aircraft were also damaged or destroyed during Operation Epic Fury, according to the report.

Seven US service members were killed in action and 417 were wounded between February 28 and June 30, while seven others died in non-hostile incidents.

IRGC officials mark 200 days of Khamenei’s rule
Inside Iran, senior IRGC officials expressed allegiance to Supreme Leader Mojtaba Khamenei as he completed 200 days in power without appearing publicly.

IRGC Aerospace Force commander Majid Mousavi praised Khamenei’s leadership in a message marking the 200th consecutive night of government-backed street gatherings. He urged participants to preserve their “sacred unity” and continue supporting the government, political officials and armed forces by following Khamenei’s directives.

Abdollah Hajisadeghi, Khamenei’s representative to the IRGC, similarly described the nightly gatherings as support for the armed forces, a “steadfast pledge of allegiance” to Mojtaba Khamenei and a demand to “avenge” slain Supreme Leader Ali Khamenei.

The Basij also expanded its Janfada mobilization campaign, sending mass text messages announcing the start of military and first-aid courses for its “people’s units.” The campaign has said preparations are underway to train and organize 1,000 “national resistance” battalions.

Chinese President Xi Jinping said on Saturday that Beijing was willing to work with other BRICS members to help restore peace and stability in the Persian Gulf and the Middle East, offering a four-point proposal aimed at reducing tensions, ending hostilities and promoting peace.

Xi’s remarks at the opening of the 18th BRICS summit in New Delhi marked China’s first public signal since the Iran-US war began six months ago that it was willing to take an active role in addressing the crisis through a coordinated BRICS effort.

Beijing has so far stopped short of directly involving itself in mediation over the conflict. It has condemned attacks on Iran, issued a broad four-point proposal during Xi’s visit to Cairo in April and called on the parties to return to negotiations. Some analysts have also said China has quietly supported mediation efforts by Pakistan and Qatar in recent months.

Mixed reactions in Iran

Former Iranian foreign minister Mohammad-Javad Zarif welcomed China’s offer on Sunday in a post on X, describing it as an opportunity to reduce tensions.

He said the move provided a “timely opportunity to ease tensions” and added that multilateral diplomacy was the only viable path to achieve peace.

Ramin Mehmanparast, a former Iranian foreign ministry spokesman, told Donya-e Eqtesad that China had clear economic and strategic interests in stability in the Persian Gulf.

“China, in addition to seeking a role in the balance of power in the world, certainly sees stability in the Persian Gulf and the Strait of Hormuz as being in line with its long-term economic interests and views tensions and conflict in this region as contrary to its interests,” he said.

He added: “The Chinese are expected to become more seriously involved and, certainly, they have the necessary capacity to exert influence.”

Rahman Ghahremanpour, a senior Middle East researcher, also said Xi’s initiative was unlikely to have been made by chance.

Xi’s comments about BRICS efforts to promote peace in the Middle East should be taken seriously, he told Donya-e Eqtesad. China has both the diplomatic capacity and the incentive to act, he said, given its concerns that a prolonged crisis could harm its economic interests and regional standing.

Ghahremanpour also wrote on X that if reports of China’s willingness to mediate were accurate, they would represent a significant development that was probably not announced without coordination with Tehran.

He suggested that US President Donald Trump’s comments about an end to the war after the US midterm elections could potentially be connected to reports of China’s interest in mediation.

But not all Iranian reactions were positive.

Heshmatollah Falahatpisheh, a former chairman of parliament’s National Security and Foreign Policy Committee, accused Xi of seeking closer alignment with Washington.

“By presenting a plan for negotiations, Xi Jinping is trying to please Trump and, in return, obtain concessions from the United States over new trade tariffs,” he told Nameh News.

Reformist politician Abbas Akhoundi, who views the US-Iran war partly through the lens of US-China competition over resources transported through the Persian Gulf, argued that Tehran would ultimately need to engage with Beijing over regional security.

“I believed, and still believe, that achieving a security regime in the Persian Gulf can be achieved through dialogue with China,” he wrote on X. “Between the lines of Mr Xi’s recent positions, I understand that if we do not move towards a mechanism for the security of the Strait of Hormuz in coordination with China, we will come under pressure from China and conditions will become harder for the Iranian government and people.”

Was Xi offering to mediate?

Some Iranian media outlets and analysts have cautioned against interpreting Xi’s remarks as a formal offer to mediate between Tehran and Washington.

They argue that Xi did not explicitly refer to mediation between Iran and the United States. Instead, he stressed cooperation among BRICS members in efforts to restore peace and stability in the Persian Gulf and Middle East.

Hamed Vafaei, a professor of Chinese literature at the University of Tehran and a China researcher, said the interpretation of Xi’s remarks as a Chinese offer to mediate was “a free interpretation” of his comments.

In a note titled “What did Xi Jinping say in India and what did we hear in Iran?” he published on X, Vafaei said the remarks should not be regarded as a sudden development or an official announcement by Beijing that it would mediate between Tehran and Washington.

Rather, he said, they should be viewed as part of a gradual evolution in China’s West Asia diplomacy that began in the early stages of the 12-day war and has continued since.

“Xi Jinping’s position today, for experts who have closely monitored and analysed Beijing’s positions over the past months, contains only one important signal, several emphases and, in his own words, a kind of pioneering declaration of responsibility for the times — not a new position announcing mediation between Iran and America,” Vafaei wrote.

Why Beijing is cautious

Ghahremanpour said China was likely to proceed cautiously because it faced risks on both sides.

“On the one hand, the Chinese are concerned that Iran may not accept their demands, and on the other, they are worried that the United States may not welcome their initiative, and therefore they are acting very cautiously,” he told Donya-e Eqtesad.

“If China tries to mediate but the problem is not resolved, differences between Iran and the countries of the region will intensify and China will be regarded as one of those responsible,” he said. “If it also enters at the global level and faces a negative response from either Iran or the United States, its credibility will be called into question.”

Canada-based analyst Shahir Shahid-Saless said Xi’s caution was understandable given the need to simultaneously manage China’s relations with the United States and Israel while preserving its important strategic and economic relationships with Iran and the Arab states of the Persian Gulf.

A failed Chinese mediation effort, he said, could impose a significant political and reputational cost on Xi personally and seriously damage his credibility.

“By placing the issue within BRICS, Xi spreads the responsibility and avoids making China, and himself, the sole owner of a possible failure,” he wrote.

“There is also a fundamental obstacle: it is difficult to imagine Washington entrusting negotiations over the Iran war to BRICS, an organization increasingly presented as an alternative to Western-led institutions and one in which Iran itself is a member,” he added.

Saudi Arabia is taking a harder military posture after efforts to defuse tensions with Tehran stalled. Riyadh had sought de-escalation, wary that a wider conflict could threaten the regional stability on which its economic ambitions depend.

A meeting planned for Monday between Iran and several Persian Gulf states over arrangements for the Strait of Hormuz was postponed after Saudi Arabia requested a delay, amid Riyadh’s growing frustration over attacks by Iran-aligned groups.

That leaves Riyadh with options, none of them ideal.

Saudi Arabia does not want an all-out war. But the Houthis may be testing how long the kingdom can afford to avoid one.

Saad bin Tefla Al Ajmi, Kuwait's former information minister, said Saudi Arabia has so far exercised patience but its military options remain open.

That restraint reflects what the kingdom has at stake. Saudi Arabia has spent years trying to avoid being dragged back into direct conflict with the Houthis, while its economic transformation depends heavily on regional stability.

"There is no stability, there is no development. There is no stability, there is no prosperity," Al Ajmi told Iran International.

But Houthi attacks on Saudi territory and advances along Yemen’s Red Sea coast are making that restraint increasingly difficult to maintain. The Saudi-led coalition said Houthi missile and drone attacks on Khamis Mushait, Abha and Taif on Monday injured 13 civilians.

Al Ajmi believes some of the Houthis' recent territorial gains could be reversed, particularly if Saudi Arabia decides to deploy its overwhelming advantage in air power. He described Houthi forces operating along the flat Tihamah coastal plain as "sitting ducks."

Saudi Arabia led a military intervention against the Houthis beginning in 2015, with direct hostilities largely subsiding after a UN-brokered truce began in 2022. Years of bombardment failed to eliminate the movement, and Riyadh subsequently spent years trying to avoid being pulled back into a full-scale Yemen war.

The question now is whether the Houthis are pushing that restraint too far.

Houthis risk overplaying their hand

The battlefield in Yemen remains fluid. The Houthis have seized Mokha, Dhubab and Perim Island and expanded their control along Yemen’s Red Sea coast, while Saudi-backed government forces have regrouped and vowed to retake lost territory. That leaves open the question of how durable the Houthis’ gains will prove.

"The Houthis fought the Saudis and the Saudi militias for years. They also have a history of being overextended," Alberto Fernandez, a former senior US diplomat, told Iran International.

Fernandez said the Houthis may have pushed too far.

"I think we could see them lose some of the territory that they've gained," he said.

"They're arrogant. Yes, they're motivated by ideology. And when you're motivated by ideology and you're arrogant, you tend to sometimes overextend," Fernandez said.

But the Houthis are also betting on reluctance from both Saudi Arabia and the United States to become drawn more deeply into the conflict.

Saudi Arabia's attempt to remain outside the wider Iran war has already "certainly backfired on them," Fernandez said.

The uncertainty over how much the kingdom can rely on its allies only complicates its options.

Fernandez described the relationship between Washington and Riyadh as increasingly complicated. The Saudis, he said, felt blindsided by the United States launching the Iran war, while Washington in turn felt unsupported by Riyadh.

That strain has become more visible as Crown Prince Mohammed bin Salman sought direct US military action against the Houthis, while Trump declined requests for US strikes and Washington limited its support to intelligence and targeting assistance.

That uncertainty also extends to the Makkah Joint Defense Agreement, signed by Saudi Arabia, Turkey and Pakistan on August 7. The pact says an armed attack against any one of the three countries will be regarded as an attack against all.

"So far [it] has turned out to be a paper tiger," Fernandez said, joking that the arrangement appeared to have the equivalent of a health insurance "pre-existing condition clause."

Saudi Arabia looks elsewhere for help

As Washington hesitates, Saudi Arabia is looking elsewhere.

British Prime Minister Andy Burnham is considering Saudi requests for diplomatic and military support to counter the Houthis, Bloomberg reported Monday, as London grows increasingly concerned about the economic consequences of another expanding front in the Iran war.

The requests come as Britain has backed Saudi Arabia’s right to defend itself against Houthi attacks and stressed the importance of protecting freedom of navigation and global trade through the Red Sea.

The widening conflict has raised the stakes beyond Yemen. Houthi gains along the Red Sea coast and around Bab el-Mandeb, combined with attacks on Saudi energy infrastructure, are putting pressure on westward export routes that have become more important while shipping through the Strait of Hormuz remains constrained.

The Houthi offensive and attacks on Saudi energy infrastructure have added further pressure to oil markets already strained by the Iran war. Brent crude climbed above $108 a barrel Monday after attacks shut down Saudi Arabia’s East-West pipeline, a crucial alternative export route while shipping through the Strait of Hormuz remains constrained.

"It gets to push up oil prices a little more," Fernandez said.

"For them, every dollar that prices go up, for them they see that as a plus for the regime, putting a little more pressure on the Americans and the Europeans."

The paradox for Tehran is that the greater the disruption caused by the widening conflict, the stronger the incentive may become for governments outside the region to help Saudi Arabia contain the threat.

Iran does not need to control the Houthis

"The broader strategic danger is that Iran does not need to control the Houthis completely to benefit from their actions," Mohamed Fahmy, a journalist and Middle East political analyst, told Iran International.

"It only needs the movement to retain sufficient military capability, autonomy and motivation to pressure critical maritime routes while Tehran maintains distance from the confrontation."

Fahmy cautioned against reducing the Houthis to an Iranian proxy.

They are "an intensely nationalist movement with their own domestic agenda and deeply rooted local interests," he said.

Their relationship with Tehran is nevertheless exceptionally close. Iran has provided weapons, military technology, intelligence and other support, Fahmy said, while the strategic interests of the two sides increasingly converge.

That convergence has become particularly consequential around the Red Sea and Bab el-Mandeb.

"One of the Houthis' strategic objectives is to exert control over Yemen's Red Sea coast and the northern Red Sea, where they can increasingly influence who is permitted to transit and who is not," Fahmy said.

For Tehran, the Houthis therefore provide an additional source of pressure on its adversaries without requiring direct Iranian military involvement.

But Saudi Arabia's military answer is not straightforward.

Fahmy pointed to Saada, the Houthis' traditional stronghold and geographical heart of their power, which has been repeatedly targeted by Saudi forces since the intervention began in 2015. Despite years of Saudi-led bombardment and military pressure, the Houthis survived and retained significant military capabilities.

"A limited campaign of additional strikes is therefore unlikely to fundamentally diminish their ability to threaten shipping or project power across the Red Sea," Fahmy said.

That leaves Saudi Arabia confronting a difficult choice.

Continued restraint risks allowing the Houthis to impose greater costs on the kingdom and giving Tehran additional leverage. But a renewed military campaign carries risks Riyadh knows well after years of fighting failed to eliminate the movement.

Iran has gained leverage as the war reaches Saudi Arabia. But the more Houthi attacks raise the costs for Riyadh, the greater the risk that Tehran’s leverage provokes the response that ultimately erodes it.

President Donald Trump said Iran wanted an agreement and left open the possibility of US engagement, while Iranian President Masoud Pezeshkian said Tehran was ready for talks, including on its nuclear program, if Washington lifted sanctions and stopped negotiating “through force.”

“The failing Nation of Iran wants to make a deal, quickly and badly,” Trump wrote on Truth Social. “I will determine whether or not the U.S.A. will choose to engage - The concept of which we are open to.”

Pezeshkian, speaking to India Today, said Iran was “ready for dialogue” within the framework of the Nuclear Non-Proliferation Treaty and international law. He questioned why Washington wanted new negotiations rather than building on an understanding he said had already been reached in Pakistan with help from Islamabad and Qatar.

“Our position is the same as what we said before: the United States should lift its sanctions, abandon unilateralism, not speak to us through force, and open the way so that we can live like the rest of the world,” Pezeshkian said.

The diplomatic signals came alongside a markedly different message from Washington’s economic campaign.

The US Treasury on Monday imposed Iran-related sanctions on Russia’s VTB Bank, accusing the lender of helping Tehran evade restrictions through banking relationships and payment arrangements.

Treasury said VTB had established correspondent relationships with sanctioned Iranian financial institutions, taken steps to move billions of dollars in frozen Iranian assets and created a rial- and ruble-based settlement system to increase trade between Russia and Iran.

The measure expanded Operation Economic Outcast, launched in August to sever what Treasury describes as Iran’s remaining financial lifelines. Treasury Secretary Scott Bessent said the department would continue targeting those providing financial, technological or material support to Tehran and would “identify, expose, and isolate Iran’s enablers.”

Bessent also renewed a call for whistleblowers worldwide to provide information on networks facilitating Iranian financing, saying people with actionable information could qualify for an award regardless of where they live or work.

The contrast between talk of negotiations and tightening pressure was also visible around the Strait of Hormuz, where Washington and Tehran offered sharply different accounts of what happened to the Panama-flagged tanker EL GAIA.

The IRGC Navy said the tanker struck a naval mine while attempting to pass through what it called a restricted route south of the strait, causing an explosion and major fire. It said the Strait of Hormuz remained closed and under its “smart control.”

US Central Command rejected that account, saying EL GAIA had been struck by an Iranian missile last month and rendered inoperable before Iran hit it again with a drone over the weekend while it sat off Oman. CENTCOM said the vessel was being towed by a regional partner and called the IRGC account false.

Another reported incident late Monday added to the uncertainty.

Hormozgan deputy governor Ahmad Nafisi told Mehr news agency that two "fishing" boats had been struck by drones about 12 miles from Larak Island and 30 miles from Kargan port, leaving several crew members missing. Search-and-rescue operations were underway, he said.

There was no immediate independent confirmation of the attack or who may have carried it out.