Iran Says That Peace Talks Trump Claims Were "Very Productive" Never Took Place

Oil prices moved back to above $100 a barrel on Tuesday after Iran denied Donald Trump's claims that the two countries had held productive peace talks, injecting fresh confusion into already volatile markets and raising doubts about whether a diplomatic end to the war was close at all.

Trump had told reporters on Monday that his envoys Steve Witkoff and Jared Kushner had held talks with a senior Iranian official on Sunday evening and would continue discussions on Monday, describing the discussions as bringing "major points of agreement" between the two sides. His Truth Social post declaring that a "COMPLETE AND TOTAL" resolution appeared within reach sent oil prices falling more than 10% and stock markets rallying. He also announced that he was extending his threatened deadline to strike Iranian power plants unless Tehran reopened the Strait of Hormuz within 48 hours by five days.

Iran quickly punctured the optimism. Parliament speaker Mohammad Baqer Qalibaf, described by sources as the Iranian interlocutor in any potential talks, called Trump's claims "fake news," saying that no negotiations had taken place since the US began bombing Iran 24 days ago. Iran's embassy in South Africa posted an image of a child's toy steering wheel placed on a car dashboard, apparently mocking Trump's suggestion that he and Iran's supreme leader could jointly manage the Strait of Hormuz. Iran's foreign ministry did, however, acknowledge "initiatives to reduce tensions."

A European official clarified that while no direct US-Iran negotiations had occurred, Egypt, Pakistan and the Gulf states were acting as message-relayers between the two sides. A Pakistani official said US Vice President JD Vance, along with Witkoff and Kushner, were expected to meet Iranian officials in Islamabad later this week, following a call between Trump and Pakistan's defence forces chief Asim Munir.

The diplomatic contradictions have sent oil prices back up. Brent crude rose around 4% to above $104 a barrel before easing to approximately $102, partially reversing Monday's sharp fall but remaining well below the $113 peak reached after Trump's initial power plant threat rattled markets on Saturday. "The underlying situation is still incredibly fragile or flammable," said IG market analyst Tony Sycamore.

On the ground, the conflict shows no sign of easing. Iran launched fresh waves of missiles at Israel on Tuesday, triggering air raid sirens across Tel Aviv and tearing holes through a multi-storey apartment building. It remains unclear whether the damage was from a direct hit or intercepted debris. Israel's military said it had conducted a large wave of strikes on central Tehran on Monday, hitting more than 50 targets including IRGC intelligence facilities and ballistic missile storage sites. Air defence systems were activated across Tehran as explosions were heard simultaneously in several districts. At least eight people were killed and 28 injured in a strike on a residential area of Tabriz in Iran's northwest. The UAE said it had intercepted five ballistic missiles and 17 drones originating from Iran.

Israel also signalled an expansion of its separate operation in Lebanon, with Defence Minister Israel Katz saying the country now planned to occupy southern Lebanon up to the Litani River. "There could be no homes or residents in areas where there was 'terror'," he said, in an apparent reference to Hezbollah.

Hardliners further consolidated their grip in Tehran. Mohammad Baqer Zolqadr, a former commander of the IRGC directly accountable to Supreme Leader Mojtaba Khamenei, was appointed head of Iran's Supreme National Security Council, replacing Ali Larijani who was killed in an Israeli strike last week.

Three senior Israeli officials said Trump appeared to be genuinely determined to reach a deal but considered it "highly unlikely" Iran would agree to US demands. Netanyahu was expected to convene security officials to discuss Trump's diplomatic push.

Asian stock markets were relatively steady on Tuesday — Japan's Nikkei rose 0.8%, Hong Kong's Hang Seng gained 1.6% and South Korea's Kospi climbed 2.2% — while European indexes showed muted declines. China dialled back planned fuel price hikes to ease the burden on drivers. The US has separately waived sanctions on Russian and Iranian oil already at sea to help alleviate supply shortages. The International Energy Agency has described the conflict's impact as the biggest-ever disruption to global energy supplies.