Trump threatens renewed Iran strikes as 60-day ceasefire deal frays

President Donald Trump warned the US and Israel would strike Iran again if Tehran fails to rein in its Lebanon proxies, threatening to unravel a 60-day ceasefire extension as Vice President JD Vance opened talks with Iranian negotiators in Switzerland.

"If the proxies are not stopped, we will attack Iran again," Trump said, according to a readout of his remarks. The warning came as Vance arrived in Buergenstock, Switzerland, for negotiations with Iranian chief negotiator Mohammad Bagher Ghalibaf, with Qatar and Pakistan serving as mediators.

The Strait of Hormuz — conduit for about 21% of global oil trade, or roughly 17 million barrels per day — remained a flash point after Iran's Islamic Revolutionary Guard Corps declared it closed Saturday, citing Israeli strikes in Lebanon. US Central Command said 55 merchant ships carrying more than 17 million barrels of oil transited the waterway that day, with US forces ensuring continued passage. Trump separately said no toll would be charged for passage through the strait during the 60-day ceasefire.

The threat of renewed US-Israeli military action against Iran risks reversing the recent decline in crude prices and triggering a broader risk-off move across equities. Brent crude had eased about 8% from its war-time peak on expectations the interim deal would hold, but the renewed threat of supply disruption could push prices higher. Safe-haven assets such as gold, which has gained about 12% year-to-date, and the US dollar may strengthen, while the VIX — currently near 18 — could spike above 25 as traders price in a return to supply disruption premiums.

Ceasefire Already Under Strain

The 14-point memorandum of understanding signed Wednesday by Trump and Iranian President Masoud Pezeshkian called for a halt to hostilities on all fronts, including Lebanon. But Israeli forces continued attacks in Lebanon over the weekend, killing dozens of people, according to Lebanese state media, while Hezbollah announced retaliatory strikes on Israeli positions. The Israeli military said one soldier was killed in combat, the fifth such death since the US-Iran deal was reached.

Iran's Supreme Leader adviser Mohammad Mokhber accused the US on X of failing to implement the first clause of the interim deal, which stipulates a ceasefire "on all fronts." He warned that if the deal were not implemented, the flow of energy through the region would remain halted.

The last time the US and Iran faced a similar escalation cycle — during the 2019 tanker attacks in the Gulf of Oman — Brent crude spiked about 15% over two weeks before stabilizing as diplomatic channels reopened. Goldman Sachs analysts have estimated that a sustained closure of the Strait of Hormuz could add $20 to $30 per barrel to global crude prices, representing a potential 25% to 38% increase from current levels.

Domestic and Diplomatic Fallout

Trump's latest threat also risks alienating the pro-Israel hawkish faction of his political base, which has already expressed dismay at the ceasefire deal. Senator Lindsey Graham, a vocal supporter of military action against Iran, said the Senate would need to approve any final agreement and expressed concern that "Iran's view of the agreement seems different than what the American negotiating team is claiming." Senator John Kennedy of Louisiana said: "Unless you were homeschooled by a day drinker, no one's confident that Iran is going to do anything."

Conservative commentator Ben Domenech said on Fox News: "This deal, and everything that we know about it... everything about this deal seems bad to me. It all seems like a setback." Mark Levin, a prominent pro-war pundit, posted: "There was a time, not long ago, when we never negotiated with terrorists or terror regimes."

The negotiations in Switzerland are expected to continue over multiple days, with Iran pushing for implementation of Articles 1, 4, 5, 10 and 11 of the MoU — covering cessation of hostilities in Lebanon, lifting of the US maritime blockade, reopening of the Strait of Hormuz, release of frozen Iranian assets, and lifting of US sanctions on Iran's oil sector. Iran's Foreign Ministry Spokesperson Esmaeil Baghaei said a quadrilateral meeting between Iran, the US, Qatar and Pakistan would be held at the resort.

This article is for informational purposes only and does not constitute investment advice.