US President Donald Trump has warned Iran it will be “hit very hard” if it does not reopen the Strait of Hormuz, though he suggested a deal could be reached as soon as Wednesday.

The waterway, which handles a significant portion of global oil and gas supplies, has become the main sticking point in negotiations between Washington and Tehran. Iran’s control over the strait and its demands to charge tolls have ratcheted up tensions since an April ceasefire collapsed.

Trump told reporters in California on Tuesday that negotiators “had a very good day” and a deal could happen “tomorrow or the next day”.

US Treasury Secretary Scott Bessent said there was a chance of a deal by Wednesday or Thursday.

The pattern has become familiar in recent weeks. Trump threatens military action against Iran, then walks it back by hinting negotiations are progressing. Last week, he warned of potential strikes on civilian infrastructure before suggesting a breakthrough was near.

Iran’s Foreign Ministry has denied holding any negotiations with Washington, even as Trump insists talks are ongoing.

Secretary of State Marco Rubio confirmed that the United States was involved in negotiations between Oman and Iran on increasing traffic through the strait.

A US news outlet reported that the three countries were close to an interim deal that Washington hoped to announce on Wednesday. According to unnamed officials, the arrangement would provide 60 days of safe passage between Iran and Oman.

Qatar, which has been mediating, said diplomatic efforts were continuing but no direct Iran-US talks were planned. Qatari leader Sheikh Tamim bin Hamad Al-Thani spoke with Trump by phone on Tuesday to discuss efforts to reduce tensions.

The resumption of diplomatic efforts led to a significant drop in oil prices. Brent crude, the global benchmark, fell 1.12% to $78.74 a barrel at 3:30 GMT, while West Texas Intermediate crude dropped 1.37% to $74.73 a barrel.

The volatile situation was underlined on Tuesday when a crew member was listed as missing after a merchant ship was hit by a projectile in the Strait of Hormuz. An Indian vessel in the Red Sea also sank following an unattributed attack.

Britain’s maritime security agency UKMTO said a cargo vessel had been struck by an “unknown projectile” off the coast of Oman. Iran continues to impose an effective blockade on the strait and insists ships coordinate crossings with Iranian authorities.

More than five months into the war, which has cost Washington billions of dollars, Iran still has the capability to fire missiles and drones at US and allied targets, as well as commercial shipping.

Trump had previously said he would maintain a US counter-blockade of Iranian ports “unless a Deal, or Total Surrender, is accomplished”. His diplomatic goals include reopening Hormuz and the denuclearization of Iran, which he acknowledged could “take a little while”.

With Hormuz effectively closed, shipping lanes through the Red Sea have become increasingly important. Coast guards rescued the crew of an Indian-flagged commercial ship that sank in the Red Sea on Tuesday after an attack, a local official in the Yemeni city of Mokha said, with New Delhi condemning the “unprovoked” aggression.

Yemen’s internationally recognized government blamed the Iran-backed Houthi militia for the attack, according to the official Saba news agency. Last month, the Houthis declared a Red Sea maritime blockade of Saudi Arabia, the world’s largest exporter of crude, and have since claimed several attacks on oil tankers and infrastructure.

All of the MSV Faize Noore Oliya’s crew members, comprising 13 Indian nationals and one Yemeni, were rescued after the vessel came under attack south of the port city of Hodeida, the official from Mokha said.

Indian Shipping Minister Sarbananda Sonowal said on X that the vessel was “hit by a projectile near Yemeni waters.” He added,
“India strongly condemns this unprovoked attack.” (AFP)