Pakistan sees opening; shipping attacks and reparations row cloud talks

Iran Peace Deal Analysis for August 12, 2026

Pakistan's foreign ministry said Tuesday and Wednesday that Washington and Tehran are close to a peace deal. Hours before, the two sides clashed on demands. Iran wants the U.S. to pay war damages before reopening the Strait of Hormuz. Trump now demands Iran pay reparations instead. This hardens Trump's earlier position, which focused on halting military operations.

Violence is undermining diplomacy. Over the last 24 hours, new attacks on shipping hit the Gulf. The U.S. fired on a vessel that defied the blockade. Trump claimed full control of the Strait and said it would reopen soon. Iran rejected that claim and has tightened its grip on the region's shipping choke points. Oil prices climbed to near $88 a barrel. Hopes for a deal have faded.

Both sides agreed to a 60-day negotiating window in early August. It is nearing its end. Pakistan has not yet produced a framework that resolves the core conflict. Iran wants compensation and strategic concessions. The U.S. wants Iran to reopen shipping lanes and limit proxy operations in the Gulf. Trump's new reparations demand, combined with military posturing and attacks at sea, shows both sides are preparing for prolonged conflict. The key test is whether Pakistan can broker any agreement on Hormuz traffic within the next week.