Main developments
US President Donald Trump said it was “highly unlikely” he would extend a ceasefire with Iran if a deal between Washington and Tehran cannot be reached before the two-week pause ends on Wednesday.
Vice-president JD Vance and top US officials are expected to leave Washington for talks in Pakistan “soon”, following conflicting statements from Trump about their whereabouts.
But Iran said it had not decided whether to attend. Foreign minister Abbas Araghchi told his Pakistani counterpart in a phone call that American threats were considered violations of the ceasefire agreement and a “major obstacle” in the diplomatic process.
The second round of bilateral talks between Israel and Lebanon will be held in Washington on Thursday.
Oil prices settled 5.6 per cent higher on Monday at $95.48 a barrel, rebounding from Friday’s steep declines, after the US’s seizure of an Iranian vessel in the Gulf of Oman hit hopes for a peace deal between Washington and Tehran.
Iran has vowed retaliation for the attack “soon”.
The S&P 500 closed 0.2 per cent lower. European stocks fell 0.8 per cent.
Tehran’s top negotiator says Iran could show ‘new cards’ in battlefield
Iran’s top negotiator has warned Tehran does “not accept negotiations under the shadow of threats” and it has prepared new ideas for the war.
“In the past two weeks we have been preparing to show new cards in the battlefield,” Mohammad Bagher Ghalibaf, Iran’s parliamentary Speaker and head of its negotiating team, wrote in a post on X.
By “imposing a blockade and violating the ceasefire”, Donald Trump was seeking to “turn this negotiating table into a surrender table”, Ghalibaf said, warning Iran would not accept negotiations in these circumstances.
Ghalibaf led Tehran’s negotiating delegation in Pakistan two weeks ago but has made no direct comment about whether Iranian officials would attend a second session of talks that are expected to take place later this week.
Trump invokes wartime powers to increase US energy production
Donald Trump has invoked wartime powers aimed at boosting fossil-fuel production and building new energy infrastructure as concerns grow over rising fuel prices because of the war in Iran.
The US president on Monday invoked the Defense Production Act to mobilise industry to increase production of coal, natural gas and petrol as well as produce and develop power-grid infrastructure.
The move diverts additional government financial support, which was secured last year in the One Big Beautiful Bill Act, to these industries to meet the national energy emergency. Trump’s flagship tax bill authorised $1bn in funding to expand the government’s ability to utilise the DPA to secure domestic capacity in industries critical for national security.
White House spokesperson Taylor Rogers said: “Today’s determinations allow the Department of Energy to use funding secured in the One Big Beautiful Bill to strengthen our grid infrastructure and unleash reliable, affordable, secure energy.”