Negotiators from Iran and the United States prepared Friday for high-level talks due to start Saturday in Islamabad, aiming to stabilise a fragile ceasefire amid continued exchanges of fire between Israel and Hezbollah and Iran’s chokehold on the Strait of Hormuz.
US Vice President JD Vance was set to depart Washington as Tehran remained tight-lipped about its delegation, seeking to pressure Washington to halt Israeli strikes in Lebanon. Semiofficial Tasnim, close to Iran’s Revolutionary Guard, warned the talks could “remain suspended” if Israel’s attacks continued.
Threats to the Strait of Hormuz persisted. Ship-tracking firm Kpler reported multiple tankers and bulk carriers moving through the strait since the ceasefire, but Iran’s near-total blockade remained in place and semiofficial outlets suggested Tehran may have mined the waterway. One Botswana-flagged LNG tanker, the Nidi, attempted a route ordered by the Revolutionary Guard but turned back, underscoring Tehran’s control.
Israel continued strikes on Hezbollah positions in Lebanon despite the truce, and Israeli leaders signalled willingness to pursue talks with Lebanon; Prime Minister Benjamin Netanyahu authorised negotiations, raising cautious hopes for wider de-escalation. Iran’s parliament speaker, Mohammad Bagher Qalibaf, warned that continued Israeli attacks would bring “explicit costs and STRONG responses.” Qalibaf has been mentioned as a possible Iranian negotiator who could meet Vance.
The ceasefire showed strain as both sides applied pressure. Washington accused Tehran of breaching commitments on the strait; President Donald Trump said Iran was doing a “very poor job” of allowing oil shipments and vowed oil would flow again without specifying measures. Trump also warned US forces would strike Iran harder if the agreement faltered.
Kuwait accused Iran and its proxies of launching drone attacks targeting the country on Thursday despite the ceasefire. Iran’s Revolutionary Guard denied carrying out such strikes, suggesting third-party actors or adversaries might be responsible, though Iran-backed militias across the region have previously provided deniability for Iranian operations.
Regional and global effects of the war continued to ripple through markets and energy policy. Asian stocks were on track for their best week since 2022 amid optimism that Israel-Lebanon talks could ease tensions and reopen oil shipping. The dollar was heading for a weekly drop as other currencies rose on hopes the ceasefire might hold. Japan announced a second release of emergency oil reserves—20 days’ worth to be distributed in May—to offset supply uncertainty. Australia and Singapore pledged closer energy cooperation to stabilise supplies disrupted by the conflict.
Pakistan moved to facilitate the Islamabad talks by offering visas on arrival for participants, while uncertainty lingered over the exact arrival times of US and Iranian delegations. Pakistan’s prime minister had earlier announced the two-week ceasefire and scheduled the talks.
Security concerns extended beyond the Gulf. Multiple times overnight into Friday, people near Tehran and other parts of Iran reported hearing what sounded like air-defence fire and explosions, though Iranian authorities did not confirm any attacks. Meanwhile, Ukrainian President Volodymyr Zelenskyy said Ukrainian forces had shot down Iranian-designed Shahed drones in several Middle Eastern countries during the war, part of wider efforts to help partners counter those weapons.
Aviation crews voiced growing fear across the industry. Airline pilots told a global union they risked penalties, lost pay or even firing if they refused to fly routes in the Middle East amid missile and drone threats and sudden airspace closures.
Economic data showed rising pressure at home as well: US consumer prices were expected to surge in March, driven in part by higher oil prices linked to the conflict, dimming hopes for an interest-rate cut this year.
As the weekend’s Islamabad talks approached, markets and governments watched for signs the ceasefire could be reinforced. The rendezvous faces major obstacles: Israel’s continued military actions in Lebanon, Iran’s insistence on a halt to those strikes, unresolved questions about the Strait of Hormuz, and lingering regional attacks and denials that together test the durability of the agreement.
