Negotiations and threats run parallel in the Strait of Hormuz: US and Iran hold key talks in Switzerland

1. On Sunday (June 21), U.S. Vice President Vance and Iran's chief negotiator Kalibaf held an approximately 80-minute meeting in Bürgenstock, Switzerland. This is the first high-level, face-to-face consultation in the 60-day U.S.-Iran diplomatic process. At the start, Vance expressed hope to "turn a new page" and asked whether it is possible to "permanently change Middle East relations." The Lake Lucerne summit involved mediators from Pakistan and Qatar and aims to consolidate the ceasefire agreement and advance a broader framework for resolving nuclear issues.2. While the meeting was underway, U.S. President Trump issued a tough threat in a Fox News interview, stating that if Iran interferes with navigation in the Strait of Hormuz, the United States would launch a military strike and seize the strait. He further warned Iran on social media not to allow Hezbollah in Lebanon to "cause trouble," or else face "even harsher strikes." Iran's chief negotiator Kalibaf responded that "they had better be cautious," emphasizing that Iran will not yield to threats.3. The meeting comes amid renewed escalation. Iran announced over the weekend the closure of the Strait of Hormuz in response to Israel's attacks on Lebanon. The U.S. Central Command had stated that commercial vessels could still pass through, but there have been no further updates. The memorandum of understanding signed earlier by Trump at the Palace of Versailles requires the U.S. to lift sanctions, unfreeze Iranian assets, and end the maritime blockade, while Iran promises to ensure freedom of passage through the strait. The memorandum also includes a clause to stop military action in Lebanon.4. U.S. intelligence agencies have warned that Israeli Prime Minister Netanyahu may continue attacks in Lebanon, potentially undermining Trump’s diplomatic efforts. However, on Saturday the Israeli government ordered the military to limit its operations in Lebanon to defensive measures. As of Sunday, fighting appeared to have eased, and there were no new reports of attacks.5. The market is closely watching the security situation in the Strait of Hormuz. The smooth passage through this waterway is crucial for stabilizing global oil prices, which have already impacted Trump’s approval ratings. After Trump made his threatening remarks, Iran's official news agency reported that the four-party talks had entered a "difficult phase," reflecting that the negotiations still face many obstacles.