In the news
On 01 June, Iranian media outlet Tasnim reported that Tehran has suspended all indirect negotiations with the US in light of Israel’s violations in Lebanon.
Iranian officials stated that the political negotiations between Washington and Tehran are being delayed by Israel’s persisting violations in Lebanon, and accused the US of “constantly changing its views and putting forward “new or contradictory demands.” Iran’s spokesperson Esmaeil Baghaei, added that Tehran is pursuing its core demand for the release of its frozen funds.
On 03 June, the Iranian Central Bank released a report warning of inflation at World War II levels, with the Iranian rial falling to 1.7 million per US dollar. Subsequently, on 04 June, Reuters reported that Iran’s exports of crude oil and condensate fell to their lowest level in at least six years in May, well below 300,000 barrels per day.
On 04 June, the US House of Representatives passed a War Powers Resolution aiming to halt further military action in Iran. The 215-208 vote was successful after four Republicans joined Democrats in a public show of disapproval of the war. President Trump rebuked the resolution as "unpatriotic" and ill-timed, as he was close to drawing a peace deal with Iran. Separately, Hezbollah rejected the US-mediated ceasefire proposal between Israel and Lebanon, as Israel continued its strikes on Lebanon and reasserted that it would not withdraw from southern Lebanon.
On 05 June, Iran reiterated its support for Hezbollah and asserted that any broader Iran-US negotiations were contingent on the end of hostilities in Lebanon and the withdrawal of Israeli forces from occupied Lebanese territory. "This war will end only when it ends in Lebanon as well," asserted Iran’s Foreign Minister Abbas Araqchi.
Issues at large
1. Intensifying Congressional pressure over the Iran war
The War Powers Resolution is a US federal law that limits the President’s ability to deploy forces into hostilities without congressional approval. Under the resolution, the President must notify Congress within 48 hours of committing armed forces and cannot keep them deployed for more than 60 days without explicit congressional authorization or a formal declaration of war. The passage of the resolution, notably backed by four Republican senators despite several prior failed attempts, signals growing domestic disapproval and war fatigue. Rising gas prices and broader increases in household costs have already fuelled public discontent and weighed on President Trump’s approval ratings. The absence of a “swift and decisive” end to the conflict, as initially promised, has further deepened this dissatisfaction. This discontent also reflects unease over Israel’s continued military actions in Lebanon, complicating already strained US-Iran negotiations, particularly amid repeated US attempts to broker a ceasefire in Lebanon as a path toward a broader US-Iran peace deal.
2. The Lebanon factor in the US-Iran stalemate
The cessation of Israeli violations in Lebanon has consistently remained a core Iranian demand for any comprehensive negotiations with the US. Israel’s continued ceasefire violations, despite US intervention, remain a key obstacle to a US-Iran settlement, further complicated by recent escalations around Beirut and the entrenchment in southern Lebanon. Iran has also become more vocal in its support for Hezbollah’s counterstrikes and opposition to Israel’s intensified military activity in Lebanon, further deepening the US-Iran impasse.
3. Rising economic pressure in Iran and the push for sanctions relief
Shipping data indicates that Iran’s crude oil exports averaged about 209,000 bpd in May, a sharp decline from 1.34 million bpd in April and nearly 1.9 million bpd in March. Iran’s latest set of demands in negotiations with the US has centered on the release of frozen assets and the lifting of stringent sanctions. This comes amid rising inflation gripping Iran’s war economy. Tehran’s economic strain, already marked by severe inflation and currency devaluation earlier in the year, has been further exacerbated by the escalation of hostilities with Washington and Tel Aviv, while disruptions in the Strait of Hormuz have dealt a significant blow to its oil-dependent economy. With Washington’s dual blockade of the strait, Iran’s oil shipments, and the income anticipated from tolls and control over the strait have dwindled, leaving the economy in a much worse state than when it started. Iran’s previously significant reliance on shadow-fleet oil exports has also come under pressure, increasing the need for sanctions relief and access to frozen funds.
In perspective
Despite intensifying domestic pressure to end the prolonged conflict, core disagreements remain unresolved, leaving both administrations in a standoff over who will concede first. While Washington has sought to address Iranian demands for a comprehensive cessation of hostilities by mediating Iran-Lebanon ceasefire negotiations, Israel’s continued operations and broader strategic ambitions, alongside Hezbollah’s retaliatory strikes, have undermined prospects for a swift resolution. The multi-front war and its protracted nature have severely eroded the Trump administration’s approval ratings, increasing pressure for a peace deal with Iran. Tehran simultaneously faces mounting economic strain from the blockade of the Strait and disruptions to its oil trade, further complicating its domestic landscape. With recent memories of severe civil unrest in early January, prompted by economic crisis and rising prices, Iran’s war-burdened economy is in dire need to stabilize on the domestic front.
