US, Iran Suggest Peace Talks Aren’t Imminent as Attacks Widen

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(Bloomberg) — The US and Iran signaled they aren’t ready to return to the negotiating table after both countries escalated attacks deep into a second week of renewed fighting. 

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US President Donald Trump said Wednesday that the Islamic Republic will pay a big price for the deaths of four US troops in the past week. He earlier vowed on social media that the US “will bomb and destroy ONE BRIDGE OR POWER PLANT,” including those around Tehran, any time Iran’s military “shoots at a ship in the Strait of Hormuz.” 

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Iran’s Interior Minister Eskandar Momeni visited Pakistan — which along with Qatar has been the main mediator in the near five-month conflict — but there was no sign his meetings were productive.

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“There are no negotiations — it’s only possible for there to be an exchange of messages,” a spokesman for the Iranian ministry said after the Tuesday visit, according to semi-official Mehr news agency. “Our new message is that the enemy violated the memorandum and should implement it,” he added, referring to the June 17 interim peace agreement that’s now effectively obsolete. 

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If the US strikes bridges or power plants, “Iran will strike infrastructure and bridges in the region, including energy facilities in which the US has interests,” the semi-official Tasnim news agency reported, citing an informed military source.

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The US widened the scope of its airstrikes on Iran overnight, with American forces striking a military site near the north-western city of Tabriz, according to Iranian media. That’s the first time the area is thought to have been hit since hostilities between the warring sides worsened two weeks ago.

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The Iranian government activated air defenses early on Wednesday in Tehran, the capital, local media reported, adding that the US struck Abdanan and Chovar in the west, near the border with Iraq.

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That was the 11th straight day of attacks on Iran, which again fired on US bases in Kuwait, Bahrain and Jordan.

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Oil prices have jumped in the past fortnight, and Brent crude traded up 2.9% to close to $94 a barrel in London on Wednesday. Refined fuel prices, including wholesale diesel in Europe, are also surging.

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Bond markets have reacted, with US 10- and 30-year Treasury yields rising to roughly two-month highs on concern inflationary pressures will prompt the Federal Reserve to raise interest rates.

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The US says it will intensify its bombing campaign until Iran agrees to reopen the Strait of Hormuz and stop attacking energy tankers and other ships going through the vital waterway. 

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So far, Iran isn’t backing down. Tehran has insisted on maintaining control of traffic through the strait, an issue that’s scuppered progress on other contentious topics, including Iran’s nuclear program.