WASHINGTON — Pakistan’s defense minister said the United States and Iran are “close to some sort of arrangement” over the Strait of Hormuz, even after both sides appeared to harden their positions in the long-deadlocked negotiations.

“Things are shaping up in favor of peace,” Khawaja Asif told reporters in Islamabad on Tuesday, without giving details of any breakthrough. Pakistan’s Interior Minister Mohsin Naqvi will shortly arrive in Tehran to hold talks with his Iranian counterpart, the Islamic Republic’s semi-official Fars agency reported.

Talks between Iran and Oman about reopening Hormuz to some maritime shipping have reached an advanced stage, Al Jazeera reported earlier, citing a Qatari Foreign Ministry spokesperson.

Oil prices erased gains following Asif’s comments, the latest in a long run of conflicting statements about the status of talks over the critical waterway. Pakistan has been mediating during the conflict, alongside Qatar.

The upbeat assessments came after U.S. President Donald Trump toughened his stance on Monday, saying Tehran should pay reparations for those killed in attacks linked to the Islamic Republic as well as in domestic protests. His comments came in response to a series of demands laid out by Iran over the weekend, including compensation for U.S. violations of a now-lapsed interim peace deal agreed by the sides in June.

“The mediators are trying to put things on the right track again, but it’s easier said than done,” said Ali Vaez, a deputy program director at the International Crisis Group.

Iran will almost certainly reject Trump’s latest demands, which the U.S. leader said will be included “firmly into any, and all, future negotiations.” The back-and-forth appeared to reduce the chance that the warring parties will be able to agree to any immediate pact on the waterway, where around a fifth of the world’s oil and liquefied natural gas flowed before the conflict began on Feb. 28.

In a sign of ongoing tensions, U.S. forces fired on a Panama-flagged ship that attempted to run the American blockade of Iranian ports early Tuesday, the Wall Street Journal reported, citing an unnamed U.S. official. Vanguard Tech had earlier said the container ship was hit by a missile and left without a command.

The U.K. navy said it received a report on Tuesday of an incident involving a container ship and military forces in the Gulf of Oman, without providing further details. It was also informed of an incident off Yemen’s Red Sea coast in which a cargo vessel reported being hit by an unknown projectile, resulting in casualties.

Brent crude traded slightly lower in afternoon trade in London, at just over $87 a barrel.

European diesel futures surged more than 10% as refineries in Libya and Russia came under attack, further tightening the market for the fuel considered the workhorse of the global economy. Saudi Arabia extinguished a fire at its Jazan oil refinery early Sunday, the country’s energy ministry said, with Yemen’s Houthi militants claiming an attack on the facility hours later.

“The region cannot remain indefinitely in a state of neither war nor peace,” Anwar Gargash, senior diplomatic adviser to the president of the United Arab Emirates, wrote in a post on X. “Its stability and the future of its peoples require clarity in vision and direction.”

Trump signaled over the weekend that he was prepared to let economic pressure on Iran build rather than launch fresh military strikes to force a reopening of Hormuz. The Islamic Republic’s economy has taken a hammering from the war, with much of its industrial capacity destroyed and crude exports severely curtailed by a U.S. blockade. Central bank data shows year-on-year inflation recently reached 77%.

The currency, meanwhile, has fallen more than 10% from its prewar level, adding to the economic pressure on Iranians. A depreciation of the rial sparked violent nationwide protests that peaked early this year, leading to a crackdown by authorities that left thousands dead. There have been no signs of the anti-government demonstrations resuming.

Tehran’s demands for a full reopening of Hormuz include the U.S. lifting its naval blockade on Iranian ports, the release of frozen assets and compensation for war damages. It has also called for a permanent end to attacks on militant groups it backs in Lebanon, Iraq, Yemen and Gaza. Trump said on Monday that Iran should be held responsible for damages stemming from conflicts in these countries.

The effective closure of Hormuz is taking a toll on the global economy and trade. The cost of hiring a supertanker to carry oil on the benchmark Middle East-to-China route approached $500,000 per day, more than twice the cost before the war.

—With assistance from Alex Longley, Carla Canivete and Eric Martin.

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