Iran defends its demands after Trump’s rejection.

Negotiations between the United States and Iran stumbled again over the weekend. Iran’s demands for U.S. war reparations, recognition of its sovereignty over the Strait of Hormuz and an end to American sanctions were among the conditions that President Trump has deemed “unacceptable,” Iran’s state-owned broadcaster reported on Monday.

The terms were detailed in a social media post by Islamic Republic of Iran Broadcasting after Mr. Trump on Sunday dismissed an Iranian counterproposal as “TOTALLY UNACCEPTABLE.” Mr. Trump did not specify his objections to the deal, which he received through Pakistani mediators.

The first two conditions would almost certainly be non-starters for the United States, while the third would be possible only if Iran were willing to make major concessions on its nuclear program, which it has shown no sign of being willing to do.

A week of strikes in the Persian Gulf had already rattled their month-old cease-fire. The truce was intended to provide an opening to negotiate a more comprehensive peace deal and end Iran’s de facto blockade of the strait, a vital waterway for oil and gas shipments.

Small-scale attacks have continued around the strait. On Sunday, the United Arab Emirates said it had again been attacked by Iranian drones,and last week American warships fired on military facilities along Iran’s coast.

Here’s what else we’re covering:

• Oil prices: Oil prices rose and stocks opened relatively flat for trading in the United States on Monday as investors reacted to Mr. Trump’s swift rejection of Iran’s response. Oil companies have posted huge profits despite the shipping disruptions; Aramco, Saudi Arabia’s national oil company, said on Monday that its first-quarter profits had jumped by 25 percent.

• Enriched uranium: In an interview with the syndicated news show “Full Measure” aired on Sunday, Mr. Trump said that the U.S. was surveilling Iran’s remaining enriched uranium stockpile and would “get that at some point.” The president’s comments on the stockpiles have been inconsistent; last month, he said he didn’t care about the uranium because it was buried “so far underground.”

• Mixed messages: Last week, the White House sought to portray the military campaign against Iran as over. But in the “Full Measure” interview, Mr. Trump said it was inaccurate to say that combat operations were finished, adding that Iran was “defeated, but that doesn’t mean they are done.”

• China summit: Mr. Trump hoped to have the conflict resolved by the time he headed to China this week to meet with Mr. Xi, who is eager to see an end to the conflict in Iran.

“To save foreign exchange,” he said, “we must accept the challenge of patriotism.” That means spending less on gasoline and diesel — to conserve supplies limited by the blockade of the Strait of Hormuz — and also on everything else that India imports. He urged people to buy less gold, farmers to use solar-powered water pumps instead of diesel, and white-collar workers to work from home.

Invoking Covid-19 pandemic restrictions, he said it is again in India’s national interest for office workers to use online meetings. Less commuting would reduce gas bills, putting less strain on India’s budget.

Speaking in the city of Hyderabad, an information technology hub in one of the few states his party has yet to conquer, Mr. Modi issued a long list of requests, many of them pointed at the urban middle class.

Those who own electric vehicles should use them more, he said, and car pool. Stop taking foreign holidays, he said to the estimated 1 percent who do. That should keep more dollars within India and protect the rupee, which has lost 10 percent of its value in the past year, half of that loss since the U.S. and Israel started bombing Iran in late February.

Mr. Modi is a latecomer to this message in Asia. The Philippines, Bangladesh and Sri Lanka, among others, have made similar requests and even demands of their citizens since March. India, by contrast, has cushioned ordinary citizens from the full pain of the energy crunch by running higher deficits and piling losses onto the state-owned oil companies.

Indians first felt the pinch from the war in Iran when supplies of cooking gas ran low. State oil companies began buying more crude oil, at higher prices, and diverting it into refineries making liquefied petroleum gas, which has kept that pain manageable. But they are losing an estimated $175 million a day, according to reports in local media.

Mr. Modi has now signaled that kicking that can down the road is no longer possible. India is missing its budgetary targets by uncomfortable margins, the currency is weakening — as the value of India’s imports rises while its exports stay flat — and inflation is rising.

The government has a fresh opportunity to do something about it. More than 150 million people cast ballots in April, and on May 4, when the results of four state elections were tallied, Mr. Modi’s party won a crucial state by a landslide.

Nomura Holdings’ research unit said in a report on Monday that “even with state elections over, there have not been any domestic fuel price hikes yet,” but that the pressure on the Indian government’s finances is “at a tipping point.” The report said that some of the measures Mr. Modi requested with his appeal to duty this week could soon become mandatory.

For years, it has been a hallmark of Mr. Modi’s governance to ask for sacrifices from the Indian public. After he suddenly invalidated 500- and 2,000-rupee bank notes in 2016 to root out “black money” used by criminals, he asked for patience dealing with the disruptions caused.

He won important elections after that exercise, even though economic growth slowed and little black money was seized. Likewise, at the outset of the Covid-19 pandemic, Mr. Modi imposed some of the most draconian lockdown measures anywhere. They shrank the economy by more than 20 percent, but he remained popular.

Such appeals haven’t always worked out so well. In November 2023, he asked well-heeled citizens to “Wed In India,” to help preserve foreign-exchange reserves. His party’s workers phoned the families of rich brides and grooms to plead for destination weddings within India instead of lavish nuptials in places like Lake Como, Italy, and Dubai.

That effort did not prevent Mr. Modi’s party from losing its parliamentary majority in 2024.

This time, Mr. Modi went a step further. He repeated the call to cut out the foreign weddings and added, “We must resolve not to purchase gold for one year.”

Gold accounts for nearly 9 percent of India’s annual import bill, behind oil and gas. Most Indian families buy it as a way to save money and to celebrate important occasions, like weddings. If they don’t give it up voluntarily, the government can restrict its purchase by other means.

Ms. Mohammadi spent 10 days in that hospital, before being transferred to another hospital in Tehran on Sunday, the Narges Mohammadi Foundation said.

Mostafa Nili, a lawyer for Ms. Mohammadi, said on social media on Sunday that she had been transferred to Tehran “following an order halting her sentence for medical treatment.”

The statement from the foundation called for “her unconditional freedom and the dismissal of all charges.”

“Narges Mohammadi’s life hangs in the balance,” said her husband, Taghi Rahmani, according to the foundation’s statement. “Narges must never be returned to the conditions that broke her health.”

Earlier this month, Mr. Rahmani said Ms. Mohammadi suffers from chronic heart problems and had suffered rough treatment in prison, including beatings by prison guards.

Ms. Mohammadi received the 2023 Nobel Peace Prize “for her fight against the oppression of women in Iran and her fight to promote human rights and freedom for all,” while serving a 10-year prison sentence on charges of threatening national security. Ms. Mohammadi was arrested again in December after she delivered a speech critical of the government while on a yearlong furlough from prison because of her health. In February, an Iranian court sentenced her to an additional seven and a half years in jail for her opposition to the government.

In a report accompanying an excerpt from Ms. Mohammadi’s upcoming memoir published by The Guardian on Sunday, Ms. Mohammadi was reported as saying there was “no hardship worse than illness combined with imprisonment.”

“Authoritarian regimes do not always need an executioner’s rope. Sometimes, they simply wait for the human body to fail,” she wrote.

Mr. Baghaei’s said that Iran had made “generous” and “reasonable and responsible” requests. But Iran’s own state broadcaster recounted a series of uncompromising conditions on Monday.

According to Iranian state media, Iran had called for the U.S. to pay “war damages” to Tehran and recognize Iranian sovereignty over the Strait of Hormuz. Both are likely non-starters for the United States, which has called for an end to Iran’s grip over the strait, a critical passage for oil and gas.

Mr. Trump had initially conditioned the ongoing temporary cease-fire with Iran, which began last month, on free transit for ships through the strait. But Iran still insists that any ships that traverse the Persian Gulf waterway do so in coordination with its forces, and Mr. Trump has repeatedly pulled back from his threats to attack Iran in protest.

Last week, Mr. Trump announced a U.S. military effort to free ships trapped in the maritime bottleneck by the war, dubbed “Project Freedom.” But roughly a day later, the effort was abruptly suspended to allow for further negotiations and has not resumed.

The Iranian counterproposal also demanded that the U.S. end its punishing economic sanctions against Iran, Iranian state media said. Analysts said that it was unlikely unless U.S. officials received major concessions on Iran’s nuclear program in exchange, compromises which Iran has so far ruled out.

Iranian officials are facing pressure at home to reach a deal. Before the war, U.S.-led sanctions had squeezed Iran’s currency, the rial, igniting demonstrations that quickly spiraled into a mass movement calling for the ouster of the Islamic Republic. Iranian security forces violently quelled the protests, killing thousands.

Since the war, Iran’s economic position has only grown more dire amid U.S.-Israeli attacks on Iranian industry, as well as a government-imposed internet blackout. An Iranian government official, Gholamhossein Mohammadi, estimated that the war has caused the loss of one million jobs, “and the direct and indirect unemployment of two million people,” in comments reported by the news outlet Tasnim.

But Iran experts say the Iranian approach reflects a newly emboldened leadership that believes it survived a concerted effort by the United States and Israel to oust it.

“One thing is clear: the Iranian regime’s reply reflects the mind-set of a leadership that believes it survived the war and won, not that it lost it,” Danny Citrinowicz, a former senior Israeli military intelligence officer who worked on Iran, wrote on social media. “As a result, its demands remain high and its willingness to compromise is extremely limited.

Both Mr. Trump and Prime Minister Benjamin Netanyahu of Israel have demanded control of Iran’s stockpiles of enriched uranium, which they fear could form the basis for a nuclear weapon. Iran has offered varying solutions to the problem, but, at least publicly, has ruled out U.S. control of the material.

Mr. Baghaei sidestepped the impasse over Iran’s nuclear ambitions on Monday, saying merely that Iranian officials would “discuss that when the time comes.”

Leo Sands contributed reporting.

Oil ticks up.

• The price of Brent crude, the global benchmark for oil, rose roughly 2 percent on Monday, trading at around $103 a barrel.

• West Texas Intermediate crude, the U.S. benchmark, moved 1.5 percent higher, trading at around $97 a barrel.

Stocks waver.

• After opening a tad lower on Monday, the S&P 500 rose about 0.3 percent by midday. On Friday, the index had notched its sixth straight week of gains.

• Stocks in Asia, where countries import vast quantities of oil and gas, were mixed. South Korea’s benchmark KOSPI Index rose more than 4 percent, while Japan’s Nikkei 225 fell less than 1 percent.

• In Europe, stocks were little changed. The Stoxx 600, a broad index that tracks the region’s largest companies, and the DAX in Germany were flat.

Gasoline prices slip.

• Gas prices held steady on Monday at a national average of $4.52 for a gallon of regular, according to the AAA motor club. Despite prices inching down since Friday, drivers were still paying about 52 percent more per gallon since the war began.

• Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.

• The average price of diesel fell a penny to $5.64 on Monday, up 50 percent since the start of the war.

• As gas prices remain elevated in the United States, Chris Wright, the energy secretary, said on Sunday that the Trump administration would be open to pausing the federal gas tax, which accounts for 18.4 cents of the per gallon price of gasoline.

What they are saying: “Markets remain on a knife edge.”

• The absence of any meaningful movement in peace talks over the last month suggests that the United States prefers reaching a deal, analysts at Deutsche Bank wrote in a note. But, they added, the uncertainty over who holds negotiating authority in Iran may be complicating progress.

• “It remains an unusual conflict with little action now for a month,” the analysts wrote. “In simple terms though, as long as the Strait of Hormuz stays closed, markets remain on a knife edge.”