US-Iran Peace Talks 2026: Hormuz, Oil, Sanctions Update

Limited progress, big unresolved issues

The United States and Iran have signalled limited progress toward a potential agreement, but officials and media reports show that key disputes remain unresolved. The discussions follow a fragile ceasefire that paused the US-Israel-Iran conflict, with negotiators now exploring a narrower arrangement to prevent a return to fighting. US officials have described a “broad agreement” in principle, while Iranian outlets and officials have pointed to a draft text being reviewed in Tehran. Despite the improvement in tone, the two sides remain divided on Iran’s stockpile of highly enriched uranium (HEU) and the future management of the Strait of Hormuz.

The latest reporting indicates that ambitions for a comprehensive peace deal have been scaled back in favour of a temporary memorandum. Iranian sources cited by Reuters said the goal is now to secure a limited document that reduces immediate risks and creates space for a longer negotiation. This shift reflects how difficult it has been to bridge the nuclear file, sanctions relief, and maritime access in one package.

What the US has said about the proposed deal

US President Donald Trump and Secretary of State Marco Rubio have confirmed progress in talks, suggesting that an announcement could come soon. But US officials have also underlined that some of Trump’s stated goals are not fully addressed in the current outline. One of the gaps highlighted by US officials is the lack of an explicit ban on uranium enrichment. Another is that the outline does not directly resolve concerns around Iran’s missile stockpile.

A Trump administration official told reporters that the US plans to lift its blockade as part of the proposed deal. The same official said Iran has agreed in principle to dispose of its highly enriched uranium. However, the official also said the US does not plan to unfreeze Iranian assets under the current proposal. US officials added that any sanctions relief would depend on how Tehran complies with the provisions of the agreement.

Iran’s signals and the draft text under review

Iranian officials have confirmed that a draft agreement is in place, according to reports cited in the provided material. Iran’s semi-official Iranian Students’ News Agency (ISNA) reported that Tehran was responding to a text submitted by the US and that the latest proposal “has narrowed the gaps to some extent.” Iranian commentary also reflected concerns about the terms related to enrichment and the handling of uranium stockpiles.

At the same time, messaging from Tehran has not been uniform. Reuters cited sources close to the matter on the Iranian side saying Tehran has not agreed to give up its enriched uranium stockpile. One Iranian source told Reuters that the nuclear issue would be addressed in negotiations for a final agreement and therefore was not part of the current deal, adding that there was no agreement for Iran’s highly enriched uranium stockpile to be shipped out of the country.

Uranium enrichment and the HEU stockpile remain the core dispute

The fate of Iran’s enriched uranium has remained central to the negotiations. US demands referenced in the reporting include Tehran handing over its enriched uranium, based on US fears that it could be used to build an atomic bomb, and committing to ending enrichment for at least a decade. A CNN report, citing sources familiar with the matter, said an agreement would include a commitment from Tehran not to pursue nuclear weapons, and that Iran may also enter negotiations to give up its stockpile of enriched uranium. Iranian officials, however, have rejected the claim that Tehran has agreed to give up its stockpile, according to the same set of reports.

Reuters reporting also outlined a major difference over the duration of any enrichment halt. Iranian sources said the United States is demanding a halt to enrichment for 20 years, while Iran wants to limit it to three to five years. The timeline for disposal of highly enriched uranium and any moratorium on enrichment would be negotiated later, US officials said.

Strait of Hormuz: access, tolls, and “pre-war levels”

The Strait of Hormuz is a critical element of the talks because it is described in the Reuters report as a vital route for about 20% of the world’s oil and gas needs. It has also been closed to most ships for weeks, according to the same reporting. A senior Iranian official cited by Reuters said gaps had narrowed in recent days over how to manage the strait, but disagreements remain, including over tolls.

Iranian media reporting added further detail. Fars news agency said that passage through the Strait of Hormuz would return to pre-war levels under Iranian management. The same report said sanctions on oil, gas and other petrochemicals would be temporarily lifted so Iran can sell its products. These points illustrate how central maritime access and energy-related sanctions are to any temporary arrangement.

Sanctions relief and frozen assets: conflicting accounts

Sanctions relief is one of the most contested parts of the negotiation, with different reports pointing in different directions. US officials said sanctions relief would depend on compliance and that the US does not plan to unfreeze Iranian assets under the current proposal. But Fars reported that Washington has agreed to partially release Tehran’s frozen funds under international sanctions.

Tasnim, another Iranian outlet referenced in the provided material, said the US was still blocking some clauses of the agreement, including the release of Iran’s frozen assets. This split matters because it suggests that the sanctions and funds component is not yet settled, even if the two sides are trying to align on a narrower memorandum.

A scaled-back “memorandum” and the 60-day window

Reuters reported that negotiators have scaled back ambitions for a comprehensive peace deal and are instead seeking a temporary memorandum to prevent a return to conflict. The reporting said the shift followed inconclusive talks in Islamabad, with deep differences still present on nuclear issues and the duration of a halt to nuclear work. If a memorandum to halt the conflict is reached, the two sides are expected to have 60 days to negotiate a final deal, which would require involvement of experts and the International Atomic Energy Agency (IAEA), Iranian sources told Reuters.

The reporting also said that White House officials did not expect a deal to be reached on a particular Sunday and believed Iran’s Supreme Leader Mojtaba Khamenei would take several days to approve any deal. This indicates that even a temporary text could face political and procedural delays.

Why this matters for markets, including India’s oil-sensitive sectors

For investors, the immediate relevance is the Strait of Hormuz, given its role in global energy flows. Any sustained restriction on shipping routes used by oil and gas supply chains can raise uncertainty for energy-linked pricing and availability. Separately, headlines around sanctions on Iranian oil, gas and petrochemicals matter because they influence expectations for how much supply can enter legal international trade channels.

In India, market participants typically watch such developments for their impact on oil-linked sectors and companies that are sensitive to energy input costs. While the reporting does not quantify any market moves, it highlights the conditions that could influence risk sentiment: maritime access, compliance-driven sanctions relief, and uncertainty around nuclear commitments.

Key points from the reporting

Conclusion

The latest disclosures show a negotiation that is moving, but not closing, with the biggest gaps still centred on uranium stockpiles, enrichment limits, sanctions relief, and control of the Strait of Hormuz. Reuters reporting suggests both sides are now prioritising a temporary memorandum aimed at preventing renewed conflict, with a possible 60-day window for a more detailed final deal involving the IAEA. Near-term direction will depend on whether the parties can reconcile differences on the HEU issue and the sanctions and frozen-funds package, and on how quickly Iran’s top leadership signs off on any draft text.