Efforts to de-escalate tensions with Iran have stalled again, with mediated talks continuing but face-to-face negotiations having been called off for the second time in a week. The impasse appears to be driven by internal divisions within Iran, where civilian leaders are reportedly open to engagement while hardline elements within the Islamic Revolutionary Guard Corps resist compromise.

This split is complicating any path to a negotiated settlement and raising concerns that a diplomatic breakthrough may remain out of reach in the near term. Meanwhile, oil prices have risen to near US$110, keeping them above their decade-plus inflationary levels.

Attention is now turning to a meeting next month between Donald Trump and Xi Jinping in Beijing, which may prove pivotal. Should no progress on Iran peace talks be made before or during that meeting, analysts warn that the range of likely outcomes could shift in a more negative direction.

One scenario sees the United States (US) escalating militarily, hammering Iranian infrastructure before withdrawing in the hope of degrading Iran’s offensive capabilities sufficiently to knock those back for more than a decade. Another possibility is a prolonged US blockade, which could sustain elevated global prices for fuel, food, and fertiliser.

Despite the newsfeed of the past week Frans Cronje told The Common Sense that, “a nearer term de-escalation remains the most likely outcome, with a US pullback and a moderation in Iranian behaviour, potentially occurring sooner rather than later, helping to avert a global economic crisis.”