According to AP News, the US-Iran ceasefire talks moved a step forward on Wednesday. Multiple anonymous members of the negotiating team told AP that both sides have agreed in principle to extend the current two-week ceasefire, giving diplomacy more breathing room. But this does not mean a binding deal is in place. Direct talks over the weekend remained deadlocked, with only seven days left before the current truce expires. None of the three core sticking points have been resolved.
The Three Fault Lines: Nuclear, Strait, and Compensation
The breakdown in direct talks last weekend exposed clear dividing lines:
- Iran's nuclear program: Tehran insists on retaining uranium enrichment capability, at most accepting a capped timeline of 10 years. Washington rejects this outright.
- Control of the Strait of Hormuz: In the first 24 hours of the US blockade, zero ships passed through; six commercial vessels followed orders to turn back. However, the number of transiting ships multiplied in the following 24 hours. The two sides remain at odds over actual control of the strategic waterway.
- War compensation: With the conflict entering its seventh week, Iran has suffered over 3,000 deaths. There is still no agreement on calculating war damages or determining compensation amounts.
Pakistan's Finance Minister Muhammad Aurangzeb told AP that Islamabad will not give up its mediation role.
Battlefield Still Burning, Markets Already Priced In
War casualty numbers continue to mount, but financial markets have already moved ahead. Oil prices fell as traders bet on a ceasefire extension, while US stocks rallied to near one-month highs. Yet the gap between “agreement in principle” and a formal extension remains wide. The next key date is April 22, when the current ceasefire expires. Anonymous US officials said a new round of direct talks is still under discussion, but no location or timeline has been set. UN Secretary-General António Guterres said talks could resume in the coming days. President Donald Trump told Fox Business: “They want to make a deal very badly, and I think we are very close to the end.”
Whether the fragile diplomatic pause holds depends on whether the three major gaps can be bridged in the final week. For now, the market's optimism is more about short-term positioning than substantive progress.