Iran Sets Terms for Talks: Strait of Hormuz First, Nuclear Negotiations Later

The Iranian press on August 3, 2026, shifted its focus from celebrating what it described as an “American retreat” to debating the conditions under which negotiations should proceed. U.S. President Donald Trump announced that talks with Iran would begin later that day, claiming that an understanding had already been reached on the Strait of Hormuz. According to Trump, once the strait is secured, negotiations can move on to an agreement aimed at dismantling Iran’s nuclear capabilities.

Tehran presents a different narrative. Foreign Ministry spokesman Esmaeil Baghaei stated that the current discussions are taking place exclusively between Iran and Oman and concern the establishment of a new, temporary, and secure shipping route. Issues involving the United States, he said, and any assessment of Washington’s commitments will only be addressed at a later stage.

This is more than a technical disagreement. Washington seeks to portray the process as a single, integrated sequence already underway: reopening the Strait of Hormuz, launching negotiations with Iran, and advancing toward a nuclear agreement. Tehran, by contrast, is deliberately separating the process into distinct phases: first, a maritime arrangement with Oman; second, an assessment of U.S. actions; and only then a decision on whether to enter broader negotiations.

Meanwhile, financial markets have responded positively to the reduced risk of military escalation. Ordinary Iranians, however, continue to grapple with rolling power outages, reduced fuel allocations, eroding pensions, and growing concern that workers will ultimately bear the financial burden of the country’s energy crisis.

Trump Announces Talks; Iran Says They Have Yet to Begin

The central development is the widening gap between Trump’s timeline and Tehran’s sequencing of events. The U.S. president announced that talks with Iran would begin on Monday afternoon. He asserted that an understanding had already been reached regarding the Strait of Hormuz and that discussions could subsequently move toward an agreement to dismantle Iran’s nuclear capabilities.

Trump did not specify where the talks would take place, who would participate, or whether they would be conducted directly or through intermediaries. Nor did he explain what, if anything, had actually been agreed regarding the strait or who was authorized to negotiate on Iran’s behalf.

At the time of the reporting reviewed here, Tehran had not confirmed the existence of direct talks with the United States. Baghaei emphasized that the only active negotiations are those between Iran and Oman, focused exclusively on establishing a maritime shipping corridor.

According to Baghaei, issues concerning the United States will be considered only at a later stage and in light of future developments. The wording leaves Tehran room to move toward a broader arrangement while preventing Trump from claiming that the threat of military action has already forced Iran to the negotiating table.

From Washington’s perspective, a phased agreement is already underway: the Strait of Hormuz will be reopened first, followed by negotiations over Iran’s nuclear program. From Tehran’s perspective, however, there is no automatic progression from a maritime arrangement to talks over the nuclear issue.

Both sides are competing not only over the substance of the negotiations but also over the narrative presented to their respective publics. Trump seeks to demonstrate that military pressure compelled Iran to compromise. Tehran, meanwhile, aims to show that it is conducting sovereign negotiations with Oman rather than capitulating to an American ultimatum.

A New Shipping Corridor Is Not the Same as Reopening the Strait of Hormuz

The most detailed Iranian messaging concerns the creation of a new shipping route through the Strait of Hormuz. Baghaei explained that Iran and Oman are discussing a corridor that differs from the existing northern and southern traffic lanes. According to him, the relevant Iranian authorities have already prepared navigational charts and submitted them to Oman.

The Strait of Hormuz is a narrow maritime passage separating Iran to the north from Oman’s Musandam Peninsula to the south. Historically, separate lanes have been designated for vessels entering and leaving the Persian Gulf.

The term “traffic separation scheme” refers to an organized system of shipping lanes, similar to traffic lanes on a highway. Ships entering the strait are directed into one channel, while outbound vessels follow another. The system is designed to reduce the risk of collisions and facilitate the orderly management of maritime traffic.

Iran now seeks to redesign these routes in a way that gives it a broader and more formally recognized role in managing maritime traffic through the strait. From Tehran’s perspective, the issue is not merely whether vessels may transit the waterway, but who sets the rules and who oversees their implementation.

Baghaei stressed that an agreement with Oman is a necessary condition but not, by itself, sufficient to reopen the strait. Iran is also demanding an end to what it describes as the naval blockade, military strikes, and other U.S. actions that it says violate previous understandings.

Foreign Minister Abbas Araghchi told the Iranian government that negotiations with Oman have entered their final stages. Even so, he stopped short of committing to the immediate and full reopening of the Strait of Hormuz.

This highlights the distinction between a “temporary shipping corridor” and the “reopening of the strait.” A temporary corridor could permit limited passage for certain vessels under conditions jointly established and monitored by Iran and Oman. A full reopening, as envisioned by Trump, would allow safe and unrestricted maritime traffic without requiring case-by-case Iranian approval.

Oman provides Tehran with both maritime expertise and a diplomatic channel. Because the two countries share jurisdiction over the geography of the strait, Iran can portray any arrangement as the product of cooperation between the littoral states rather than compliance with American demands.

Pezeshkian Seeks to Revive the Islamabad Memorandum

President Masoud Pezeshkian has signaled a willingness to pursue diplomatic progress, but through previously established understandings rather than by accepting Trump’s new conditions.

Pezeshkian described the Islamabad Memorandum as the product of a joint decision by Iran’s Supreme National Security Council and as the foundation of the country’s current foreign policy. The memorandum, drafted through Pakistani mediation, was intended to serve as a framework for moving from a temporary de-escalation toward a broader political settlement.

The president did not claim that the memorandum is currently being fully implemented. Instead, he called on the United States to return to the commitments that Iran says Washington violated. This allows him to advocate renewed diplomacy without accepting the argument that the threat of military action forced Tehran to change course.

Pezeshkian also linked diplomatic progress to domestic unity. He argued that national cohesion is Iran’s greatest strategic asset in confronting the current crisis. He called for a combination of public service, justice, civic participation, and respect for citizens, while warning that the public would ultimately judge the government by its performance rather than its rhetoric.

The message was also directed at Iran’s hardline camp. Pezeshkian seeks to broaden the meaning of Iran’s strategic posture. Hardliners argue that military deterrence forced Trump to back down, eliminating any need for compromise. The president, by contrast, maintains that military strength should create the conditions for restoring diplomacy, rebuilding infrastructure, and addressing the country’s economic crisis.

Iranian Newspapers Agree Trump Backed Down, but Differ on What Comes Next

The Iranian press is nearly unanimous on one point: Trump canceled the planned military strike because of fears of an Iranian response and the wider regional consequences. The disagreement begins with what Iran should do next.

Reformist newspapers argue that the suspension of military action resulted from several factors, including Iran’s military capabilities, the economic costs of war, the risk to Gulf energy infrastructure, and diplomatic pressure exerted by regional mediators.

Hardline newspapers, by contrast, argue that because the Strait of Hormuz has not been fully reopened, the suspension of military action should not be treated as an opportunity for compromise. In their view, Trump’s decision to halt the operation demonstrates that Iranian deterrence is working and that there is no reason to grant the United States concessions it failed to obtain through military pressure.

The newspaper Vatan-e Emrooz focused on declining public support for war among American voters and within Trump’s own political base. It argued that the president retreated not only because of fears of an Iranian response but also because military conflict was becoming increasingly costly and politically unpopular in the United States.

The economic daily Donya-e Eqtesad raised a different question: if a genuine pause in tensions has emerged, will the government use it to reform the state budget, the banking sector, and investment policy, or will it squander the opportunity by expanding current spending?

From the perspective of Iran’s economic camp, a political agreement is not a solution in itself. It merely provides the government with time to implement structural reforms. Without changes in economic policy, neither the reopening of the Strait of Hormuz nor sanctions relief will resolve the country’s underlying economic problems.

The newspaper Shargh described the current moment as a transition from proxy warfare to compelled diplomacy. It highlighted the role of regional mediators while warning that the gap between the American and Iranian narratives continues to push the prospect of a durable agreement further out of reach.

The Nuclear Issue Returns as an Ultimatum, Not a Negotiation

Despite Trump’s announcement, there is still no confirmation that talks have begun on uranium enrichment, Iran’s uranium stockpile, its centrifuges, or the return of inspectors from the International Atomic Energy Agency.

Trump has spoken of “dismantling Iran’s nuclear capability,” but he has not explained what the term means. It could refer to a commitment not to develop nuclear weapons, an end to uranium enrichment, the removal of Iran’s enriched uranium stockpile from the country, or the dismantling of nuclear facilities and infrastructure.

These are not equivalent demands. Iran could declare that it does not seek nuclear weapons while continuing to insist on its right to enrich uranium. Washington, meanwhile, could demand zero enrichment, intrusive inspections, and the dismantling of certain facilities. Each of these possibilities would produce a fundamentally different agreement.

Tehran has not presented an updated nuclear proposal either. It has given no indication that it is prepared to abandon enrichment, surrender its uranium stockpile, or grant inspectors full access to sites damaged in the strikes.

The gap over the nuclear issue may prove even wider than the disagreement over the Strait of Hormuz. In the strait, the parties can map out a temporary route, establish coordination mechanisms, and verify how many vessels have passed through. The nuclear program requires decisions on nuclear material, facilities, inspections, sanctions, and timetables.

At this stage, the nuclear issue is not the subject of active negotiations. It is the next item Trump is seeking to impose on the agenda. Tehran insists that there is no automatic transition from a maritime arrangement to a nuclear agreement.

Markets Are Pricing in a Pause, Not an Agreement

The easing of the threat of an attack quickly affected Iran’s currency and gold markets. One gram of 18-karat gold traded at approximately 18.28 million tomans, while the Emami gold coin traded at around 183.5 million tomans. Both declined in value.

The Emami coin is an official gold coin widely used in Iran as a savings instrument and a hedge against inflation. When the public fears escalation, currency depreciation, or a sharp rise in prices, demand for gold and these coins increases.

The free-market dollar also fell, trading at around 191,000 tomans after declining by approximately 2,700 tomans the previous day. Even so, its value remained about 8 percent higher than a month earlier.

The toman is the currency unit Iranians use in everyday life. One toman equals ten rials, the official currency. The exceptionally high prices illustrate the extent of the erosion in the value of Iran’s currency.

The market is not assuming that an agreement has been reached. It is responding primarily to the reduced risk of an imminent U.S. attack. Gold prices and the dollar have therefore fallen, but they have not returned to the levels recorded before the escalation.

If the talks with Oman lead to the stable passage of ships and a diplomatic channel develops with the United States, the decline could continue. If it becomes clear that Trump and Tehran were referring to different processes, the risk premium could return quickly.

Power Outages Continue Even as Markets Calm

The diplomatic easing has not changed the condition of Iran’s power grid. The electricity company in Kurdistan Province published a schedule of possible outages in Sanandaj throughout the day, from parts of the morning until midnight.

Sanandaj is the capital of Kurdistan Province in western Iran. According to the electricity company, the planned outages are intended to prevent overloading and preserve grid stability.

This technical description conceals a harsher reality. When the state cannot provide a continuous electricity supply, factories reduce production, businesses lose revenue, and households struggle to cope with the heat.

The outages also affect workers’ wages. A labor activist warned against a proposal to designate days on which factories lose electricity as workers’ weekly rest days and require employees to report to work on Fridays without the additional compensation required by law.

Friday is the weekly day of rest in Iran. If a factory closes during the week because of an electricity shortage and then requires workers to make up the lost hours on Friday, the cost of the power grid’s failure is effectively transferred to the workers.

This is the position of a labor activist, not a government decision, but it exposes the central social question: who will pay for the damage to infrastructure and the continuing energy shortage?

Fuel Allocations Are Shrinking as Pensioners Wait for Their Money

The government has promised that the basic gasoline allocation will remain unchanged. Drivers will continue to receive 60 liters per month at the subsidized price of 1,500 tomans per liter.

The second allocation, sold at 3,000 tomans per liter, has already been reduced. Before the war, it stood at 100 liters per month. It has now been cut to just 50 liters.

Iran operates a fuel-card system under which each driver receives a limited quantity of gasoline at a subsidized price. Once that allocation is exhausted, the driver must use the more expensive allocation or purchase fuel at the free-market price.

The government spokeswoman did not rule out a future change in the price of free-market fuel. She promised that any decision would be announced in advance, but the discussion itself has generated public concern. Increases in gasoline prices have previously triggered widespread protests in Iran, making any change in this area a security and political decision as well as an economic one.

At the same time, Social Security pensioners are demanding payment of pension adjustments owed for April and May. They are also seeking compensation for the loss in value caused by the delay.

When inflation is high and the currency is depreciating, a payment made late is not worth the amount that should have been received months earlier. A one-day decline in the dollar exchange rate does not restore the purchasing power pensioners have already lost.

This is where the gap between diplomatic headlines and daily life becomes clear. The government may report progress in negotiations and falling gold prices, but citizens are still dealing with an unreliable electricity supply, shrinking fuel allocations, and pensions that have not been paid on time.

The Time Iran Has Gained Is Not a Solution

The developments of August 3 do not yet point to an agreement. Rather, they reveal a struggle over the sequencing of negotiations. The United States seeks to portray the suspension of military action as leverage that produced immediate talks, the reopening of the Strait of Hormuz, and a transition toward resolving the nuclear issue.

Iran is trying to separate these stages. It first wants a maritime arrangement with Oman that recognizes its role in managing traffic through the strait. It then wants to assess whether the United States ends the blockade and halts its military strikes. Only at a later stage is Tehran prepared to consider discussions on broader issues.

The encouraging sign is that, according to Araghchi, the talks with Oman have reached an advanced stage. The negative sign is that Washington and Tehran are still not confirming the same agreement, or even the same negotiating process.

The practical test will be the movement of ships. If a temporary route is announced and vessels begin using it on a stable basis, that could be considered an initial result. If the blockade and military activity are reduced at the same time, a return to the Islamabad Memorandum could then be explored.

Only after that would the nuclear issue move onto the agenda in a substantive way. Until then, Trump is presenting an American objective, not an Iranian commitment.

Iran has gained time, but not a solution. Markets have calmed, while power outages continue, fuel allocations are shrinking, and workers and pensioners are demanding that the cost of the war not become a permanent burden on household finances.