From Washington, President Donald Trump has dramatically raised hopes for an end to the three-month-old conflict with Iran, declaring that a peace agreement could be signed as soon as this weekend in Europe. The deal, he told reporters at the White House on Thursday, would officially reopen the Strait of Hormuz, which has been effectively closed by Iranian forces, sending global energy prices soaring. “We just made a great settlement of the war with Iran,” Trump said, adding that Vice President JD Vance would attend the signing ceremony. The apparent breakthrough comes after weeks of intense but unpublicised negotiations, with Trump suggesting Iran’s Supreme Leader had personally approved the pact and that Tehran had agreed not to pursue nuclear weapons.

However, Iranian officials struck a markedly different tone. Foreign Ministry spokesperson Esmaeil Baghaei told state media that while large portions of the negotiating text had been finalised, “we have not reached a final conclusion on this matter” and that Iran would not compromise on its red lines. The carefully worded rebuttal, echoed across Iranian outlets, underscored the gap between Trump’s confident pronouncements and the guarded posture in Tehran, where diplomats emphasised ongoing reviews by the relevant decision-making bodies. Sources familiar with the talks, speaking on condition of anonymity, suggested that while substantive progress had been made, several technical annexes remained under discussion, particularly concerning the sequencing of sanctions relief and verification mechanisms.

Viewed from European capitals, the flurry of diplomacy has been met with cautious optimism, but also with memories of past eleventh-hour collapses in Middle East peace efforts. European Union officials have long pushed for a negotiated end to the fighting, which has killed thousands and threatened the continuity of energy supplies through the strategic chokepoint. The Strait of Hormuz, through which roughly a fifth of the world’s oil passes, has been at the centre of the crisis since Iran began restricting traffic in retaliation for US-led strikes. Trump confirmed he had called off fresh strikes earlier in the week, a decision that may have created the space for the current momentum.

For global markets, the prospect of a deal offers a respite from the volatility that has defined energy trading for months. Yet analysts in London note that even if an agreement is signed, the path to full implementation is fraught. Iran’s insistence on its “red lines” likely refers to demands for an immediate cessation of hostilities and a clear timeline for the withdrawal of foreign naval forces from the Gulf. In Washington, the announcement has been framed as a vindication of Trump’s “maximum pressure” strategy, though critics warn that moving too quickly could empower hardliners in Tehran who oppose any concession.

As both sides prepare for what may be a historic weekend, the world watches a ribbon of water that has become a fault line. The coming days will test whether Trump’s deal-making instincts can deliver a durable peace or whether the gap between rhetoric and reality will once again widen.