Sixty days into the US-Israeli war on Iran, peace talks are stalled and the world is bracing for yet more economic pain. RT asks how we got here, and who – if anyone – is really winning in the Persian Gulf?
April 29 marks 60 days since the US and Israel launched their war on Iran. The initial hours of the conflict were marked by extreme brutality. An American missile strike killed more than 160 schoolgirls at an elementary school in Minab and dozens of the Iranian political and clerical elite were killed along with their families in missile attacks. A quick and decisive victory, it seemed, was at hand for Washington and West Jerusalem.
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Major international energy agencies, including the International Atomic Energy Association (IAEA), the International Air Association (IATA), the International Monetary Fund (IMF), as well as shipping giants such as Vitol have warned of an energy crisis that could be substantially larger than the oil shocks of the 1970s. OPEC, the oil producing cartel, has also fractured, with the United Arab Emirates leaving in April 2026.
Meanwhile, shortages have emerged across numerous petroleum products, from naphtha to diesel and jet fuel. Rationing has been introduced in some countries, especially in Asia. Around one-third of the global fertilizer trade passes through the region, making this disruption a particularly ominous one for food prices.
Analysts warn of a slow-moving hurricane stalking the global economy as supply chains are pressured, inventories run low, and the specter of inflation returns. Although a global recession would eventually reach all corners of the globe, the effects so far have been disproportionately felt in Asia, which is more reliant on energy flows through Hormuz.
Oddly, stock markets have in many cases surged to new highs. This has led some analysts to talk about a disconnect between financial markets and physical reality. Such a disconnect is also evident in the often vast spread between the spot price of oil (for physical cargoes) and the much lower futures price. On the other hand, a new bout of inflation would be bullish for stocks – as long as the economic carnage is contained.
How are peace talks progressing?
A ceasefire between the US and Iran took effect on April 8, with Israel and Hezbollah entering a fragile truce a week later. Talks between Washington and Tehran, however, have shown little sign of a breakthrough. Iran wants an immediate end to hostilities, security guarantees, and the lifting of the US blockade, while the US wants any deal to involve restrictions on Iran’s nuclear enrichment.
Iranian Foreign Minister Araghchi has spent the last week meeting with mediators in Pakistan and Oman, and shoring up diplomatic support in Moscow. According to Reuters, however, Trump is unhappy with Tehran’s latest proposal, and talks remain at an impasse.
Pleased to engage with Russia at the highest level as the region is in major flux.Recent events have evidenced the depth and strength of our strategic partnership. As our relationship continues to grow, we are grateful for solidarity and welcome Russia’s support for diplomacy. pic.twitter.com/I1VyDSfxET
— Seyed Abbas Araghchi (@araghchi) April 28, 2026
What happens next?
Two months since the war began, the US is bogged down in a conflict that Trump predicted would be over four weeks ago, with few of its objectives achieved. Washington’s European allies have refused Trump’s pleas and admonishments for help, American warplanes are banned from NATO airbases in multiple European countries, and even former backers of Trump, like Italian Prime Minister Giorgia Meloni, have distanced themselves from the US president.
At home in the US, the war on Iran is the least popular military escapade in American history. With Trump’s approval rating sinking to a new low of 34% on April 29, the embattled president faces a new legal threat on May 1, when, 60 days after he first notified Capitol Hill of the war, Congress is formally required to authorize its continuation. Should Trump return to hostilities after that date, Democrats are reportedly planning legal action to end the war.
Israel has continued to wage war on Lebanon, regardless of the insistence by two parties to the negotiations that the Jewish state was bound to a ceasefire agreement.
Iran has been significantly damaged, but has emerged in control of the Strait of Hormuz and therefore much of the world’s oil supply. Although the US is now preventing Iranian vessels from transiting the strait, Tehran – sanctioned for decades by the West – is betting that it can withstand more economic pain than Trump and his allies can.
Trump now faces an unenviable choice: cut his losses, take a deal, and retreat, or drag the US and the world economy into the kind of Middle Eastern quagmire he once swore he’d never end up in.