Oil Sunday Brief | May 3

The proposal sought to postpone nuclear talks to a later stage, an issue Trump has considered a red line.

Withdrawal of U.S. forces from Iran’s surroundings

Lifting the naval blockade and a new mechanism for the Strait

Lifting sanctions

Release of Iran’s frozen assets

Paying compensation

Ending war on all fronts, including Lebanon

15 year enrichment freeze, after which time Iran will enrich to 3.5%

an international body to administer a general peace between the US, Israel, Iran and Hezbollah.

reopening of the strait, including minesweeping (Iran has offered to cooperate with US on this).

gradually ending blockade (so not immediate)

a new clause on "compensation" (unclear but could address tolls)

Speaking to reporters in Florida before boarding Air Force One on Saturday, Trump confirmed that he had been briefed on the “concept of the deal”.

In a post on Truth Social later, Trump said it was difficult to imagine that the Iranian proposal would be acceptable as Tehran had “not yet paid a big enough price for what they have done to Humanity, and the World, over the last 47 years.”

A senior Israeli officer who briefed reporters on Friday said any peace agreement without a cessation of Iran’s uranium enrichment programme and the surrender of its stockpile of highly enriched uranium would be considered a failure.

Its 14-point document does not appear representative of a regime under pressure - instead one that appears to try and reshape the strategic landscape in its favour. As it stands - Trump has rejected the deal on Sunday evening.

As talks centre around Hormuz (something that was open before this all began) talks about nuclear or missile programmes remain absent, highlighting how severe the diplomatic picture is at present.

The U.S. remains in an unenviable situation - take a deal that leaves it in a worse position or militarily escalate again and likely fail to get a suitable resolution. Meanwhile, the current stalemate adds continued pressure on global energy markets.

Iran’s proposal sends a clear message: it does not intend to concede while Trumps latest comments suggest the negotiations are not developing. Foreign Ministry spokesperson Baghaei has confirmed Tehran is now reviewing the feedback.

The question now is whether this pressure will force Trump to consider an action he has so far avoided: a ground operation, or "boots on the ground."

Trump said to Fox last weekend that Iran had three days left before its infrastructure ‘exploded’. Based on the deadline, Iran’s deadline would have been hit on Wednesday – something Iranian officials mocked via X (See screenshot below from Speaker of the Parliament of Iran – he was for a while believed to be leading negotiations with the US though has since claimed he had quit the position)

Kpler suggested on April 21 that Iran could run out of crude storage in 12 to 22 days if the blockade persists. The blockade has been in place since April 13.

Tehran is proactively reducing crude output in a move to stay ahead of capacity limits rather than waiting for tanks to fill completely, according to the senior official reported by Bloomberg this weekend.

The move could affect as much as 30% of its oil reservoirs, the person said, but the risks are manageable using engineering and operational lessons learned from past sanctions.

The message it sends at present is that Iran has more flexibility to ride out the blockade than Washington has been presenting. As it stands, this is the only real leverage the U.S. has against Iran - though it is also trying to dismantle some of its outlets in China via sanctions. That however is a move that is starting to cause problems in an already strained relationship with Beijing.

“Significant damage was also done to the infrastructure of the oil loading port,” Zelenskyy claimed while referencing the Primorsk strike.

Primorsk, ‌‌one of Russia’s largest export gateways, has the capacity to handle one million bpd of oil.

Zelenskyy said his country’s forces also struck two shadow fleet tankers in waters at the ⁠⁠entrance to the Russian Black Sea port of Novorossiysk.

Ukraine's Security Service, the SBU, said on Thursday its drones struck an oil refinery deep into Russia near the city of Perm – a 1500km strike.

Putin held a phone call with Trump on April 29, during which the Russian leader expressed readiness to declare a temporary pause in fighting around Russia's May 9 Victory Day commemorations.

"We will clarify what exactly this is about - a few hours of security for a parade in Moscow, or something more," Zelensky said. "Our proposal is a long-term ceasefire, reliable and guaranteed security for people, and a lasting peace."

Clearly efforts to push for a ceasefire arrangement between Russia and Ukraine are on the back burner while the Iran situation goes from bad to worse but the strikes on its energy keeps Zelensky in the picture. The attacks seem set to maintain pace and at greater depths into Russia.