President Donald Trump paused airstrikes on Iran for a third consecutive night on Sunday, matching a temporary halt by Tehran and pushing oil prices below $90 per barrel. United Nations Ambassador Mike Waltz confirmed the diplomatic pause, as international mediators work to revive negotiations.
Diplomatic Lull Follows Weeks of Escalation in the Strait of Hormuz
The United States and Iran have refrained from military actions for three nights running, creating a fragile opening for international diplomacy after nearly two weeks of intensive bombardment. The temporary cessation follows 13 consecutive nights of U.S. airstrikes aimed at degrading Iranian capabilities in the strategic Strait of Hormuz. Those military moves had effectively unraveled a broader ceasefire originally struck in June. Speaking to Fox News on Sunday, U.S. Ambassador to the UN Mike Waltz said the president was giving talks some space, he's giving it a little bit of room.
An Iranian army spokesperson said on Sunday that Tehran had halted “retaliatory” attacks in the region in response.
Financial markets reacted swiftly to the quiet. Oil prices dropped sharply, falling below $90 per barrel on Monday morning after hitting $100 last week for the first time since May. Prediction markets also shifted; the market for a potential U.S. announcement ending the Iranian blockade by July 31 has seen a decline, now priced at 11.5% YES, down from 22% just a day ago, while the probability for the blockade ending by August 31 remains more optimistic, with a current pricing of 48.5% YES, despite a recent drop from 60%.
Washington and Tehran Weigh Terms as Mediators Press for Talks
While the bombing campaign is paused, the underlying conflict remains largely unresolved. Asked whether Trump had decided against escalation for now, Waltz told NBC: I wouldn't go that far at all. The president is keeping all options on the table.
Speaking to CBS, he added: We'll see over the next coming days. But make no mistake, additional military assets are moving into the region.
Waltz further stated: The regime should believe the president when he says they're locked and loaded, and where all options are on the table.
As of Monday, Trump had not spoken publicly on the latest developments, but earlier posted computer-generated images on his Truth Social account that depicted US military planes bombing Iranian ships and Kharg island.
Behind the scenes, regional intermediaries have intensified their outreach. Anadolu Agency, citing its sources, reported that Pakistan and Qatar had intensified exchanges of messages between Washington and Tehran after both sides communicated their responses to a joint proposal aimed at ending the conflict. The proposal reportedly calls for both countries to return to their pre-July 9 positions, paving the way for renewed negotiations, with sources indicating both sides expressed willingness to pursue dialogue and diplomacy while cautioning that the pause remained fragile. Concurrently, Iran and Oman held several rounds of technical talks in Tehran on Friday and Saturday to discuss management of the Strait of Hormuz, according to Iranian foreign ministry spokesperson Esmaeil Baghaei.
Despite the diplomatic activity, tensions remain high. U.S. media reports from The New York Times and CNN indicated that concerns over dwindling defensive missile supplies, along with fears of a wider regional conflict, influenced the decision to suspend plans for further escalation, with Vice President JD Vance and senior military officials also raising concerns about expanding the conflict. However, Ambassador Waltz rejected reports in the New York Times that administration officials had warned expanding hostilities could dangerously drain a diminished stockpile of air defence munitions, stating: The US military… has everything that it needs to conduct this campaign as effectively as it needs to be.
According to Reuters, Iran also suspended its retaliatory attacks for two days, with a senior Iranian official stating Tehran would halt its operations as long as Washington maintained its pause while warning that Iran was prepared to respond broadly if the United States resumed its strikes.
Broader Regional Friction and What Comes Next
The history of recent hostilities highlights that disputes over control of the strait reignited U.S.-Iran tensions earlier this month and remain a major block to permanently ending the war, which stems from an earlier memorandum of understanding signed in June to halt military operations and reopen the strait over a 60-day period. That agreement broke down after Iranian forces attacked tankers in the Strait of Hormuz on July 13, prompting the U.S. to resume airstrikes, reinstate its naval blockade on Iranian ports, and face Iranian retaliations against U.S. military facilities and bases across the Middle East that killed four American soldiers.
Observers are closely watching for any official statements from key actors, including U.S. President Donald Trump or Mojtaba Khamenei, which could influence market perceptions and determine whether the current pause leads to a lasting resolution or a resumption of hostilities.
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