President Donald Trump declared the U.S. conflict with Iran "very close to over" on Tuesday, raising hopes that weeks of military confrontation in the Persian Gulf could soon give way to renewed negotiations—though on terms that would require significant Iranian concessions.

Speaking to reporters at the White House, Trump said diplomatic talks could resume "in days, not weeks," even as American naval forces continue blocking Iranian ports in an operation that has effectively halted the country's oil exports. The comments came as Pakistan's government announced it was leading a regional mediation effort, joining Qatar and Oman in attempting to broker a settlement.

"The Iranians know they can't win this," Trump said. "They're losing billions. Their people are suffering. But I'll make a deal with them—a good deal, better than the disaster Obama gave them. And when we do, you watch: the stock market is going to boom."

The president's optimistic assessment marks a notable shift in tone from just a week ago, when U.S. airstrikes hit Iranian missile production facilities and Tehran vowed "severe retaliation." The current crisis began in late March when Iranian-backed militias attacked American forces in Iraq, prompting a cycle of escalation that brought the two nations closer to direct war than at any point since the 1980s.

The Squeeze Strategy

The naval blockade, which began twelve days ago, represents the core of Trump's approach: applying severe economic pressure while keeping the door open for diplomacy. U.S. destroyers and Coast Guard cutters have effectively sealed Iran's major oil terminals at Kharg Island and Bandar Abbas, preventing tankers from loading crude that accounts for roughly 70 percent of government revenue.

The impact has been immediate and severe. Iran's currency, the rial, has lost nearly 40 percent of its value in two weeks. Long queues have formed at gas stations in Tehran despite Iran being an oil-producing nation. Satellite imagery analyzed by maritime tracking firms shows more than 30 laden tankers anchored offshore, unable to deliver their cargo.

"This is economic warfare at a scale we haven't seen since the sanctions on Saddam's Iraq," said Esfandyar Batmanghelidj, founder of the Bourse & Bazaar economic analysis group. "The question is whether Iran's leadership will bend before the pressure creates internal instability that makes negotiation impossible."

Iranian officials have sent mixed signals. Foreign Minister Hossein Amir-Abdollahian told state television that Iran would "never negotiate under the barrel of a gun," while Supreme Leader Ali Khamenei has remained publicly silent for five days—an unusual absence that Iran analysts suggest may indicate internal deliberations about whether to pursue talks.

The Enrichment Red Line

According to reporting by The Washington Post and NPR, preliminary contacts have occurred through intermediaries in Oman, but a significant gap remains on uranium enrichment—the technical process that can produce both nuclear fuel and weapons material.

Iranian negotiators have reportedly proposed freezing enrichment at current levels (around 60 percent purity, close to weapons-grade) in exchange for sanctions relief and an end to the blockade. Trump flatly rejected any such compromise on Tuesday.

"No enrichment. Zero. That's the deal," Trump told reporters. "They can have peaceful nuclear energy—we'll help them with that, the best technology. But no enrichment on Iranian soil. That's non-negotiable."

The position represents a harder line than even the 2015 nuclear agreement negotiated under President Obama, which allowed Iran to enrich uranium to 3.67 percent for civilian purposes. Trump withdrew from that agreement during his previous term, calling it "the worst deal ever negotiated."

Iranian officials have long maintained that uranium enrichment is a sovereign right under the Nuclear Non-Proliferation Treaty, making Trump's demand a difficult political sell in Tehran even if economic pressure mounts.

Regional Mediation Efforts

Pakistan's involvement adds a new dimension to the diplomatic landscape. Prime Minister Shehbaz Sharif announced that he had spoken with both Trump and Iranian President Masoud Pezeshkian, offering Islamabad as a venue for direct talks.

Pakistan maintains relationships with both Washington and Tehran, though its motivation likely includes concern about regional stability. A full-scale U.S.-Iran war would send oil prices soaring and potentially draw in Pakistan's rival India, which has historically maintained strong ties with Iran despite increasing alignment with Washington.

Qatar and Oman, traditional mediators between Washington and Tehran, are also reportedly active. Oman hosted the secret talks that led to the 2015 nuclear deal and has long positioned itself as a neutral party in Gulf disputes.

"The Pakistanis, Qataris, and Omanis all have credibility with both sides," said Vali Nasr, a professor at Johns Hopkins School of Advanced International Studies. "But mediation only works if both parties are ready to compromise. Right now, we have two maximalist positions."

Economic and Market Implications

Trump's reference to the stock market reflects his long-standing tendency to view foreign policy through an economic lens. U.S. equity markets have been volatile during the crisis, with the S&P 500 down roughly 8 percent from its pre-conflict peak as investors worried about oil supply disruptions and broader Middle East instability.

Oil prices spiked to $118 per barrel last week—the highest since 2022—but have since retreated to around $95 as traders bet on a diplomatic resolution. A deal that ends the blockade and allows Iranian oil back onto world markets could push prices significantly lower, providing relief to consumers globally.

However, some analysts warn that Trump's strategy carries significant risks. If negotiations fail and the blockade continues for months, Iran's government could face a choice between capitulation and escalation—potentially including attacks on Gulf shipping or oil infrastructure in Saudi Arabia and the UAE.

"Trump is betting he can inflict enough pain to force a surrender without triggering a regional war," said Karim Sadjadpour of the Carnegie Endowment for International Peace. "It's a high-stakes gamble. Iran's leadership has survived worse economic conditions before, and they may calculate that they can outlast Trump politically."

For now, the president's optimistic timeline—talks resuming this week, a deal soon after—remains aspirational. Both Washington and Tehran have climbed far out on rhetorical limbs, making the climb down toward compromise politically treacherous for leaders on both sides.