The U.S. war on Iran has turned into a battle of wills in the Strait of Hormuz and the Gulf of Oman, marked by duelling naval blockades and stalled diplomacy. Iran, which has effectively restricted the free flow of traffic through the Strait of Hormuz since the U.S. and Israel attacks on February 28, has refused to ease its control over the critical waterway. The U.S. insists that its blockade of Iranian ports will stay in place until a deal is reached. Last week, Iranian Foreign Minister Abbas Araghchi travelled to Pakistan, which mediated the first round of direct talks on April 11, but Iran declined further direct talks with Washington. The White House had earlier said it would send special envoy Steve Witkoff and Jared Kushner to Islamabad, but President Donald Trumpcancelled their trip after Mr. Araghchi left the Pakistani capital. Mr. Trump has repeatedly said that Iran wants a deal. Yet, Tehran continues to refuse talks with the U.S., citing Israel’s attacks on Lebanon and America’s blockade in the Gulf of Oman. On paper, a ceasefire is in place in Lebanon, and Mr. Trump said earlier this month that Israel was “prohibited” from attacking the country, but Israeli air strikes have continued. He has also indicated no urgency to lift the blockade, betting that sustained economic pressure will force Iran to change its position.

The only silver lining is that the Iran ceasefire, announced on April 8, is still holding. Despite Mr. Trump’s threats, he has held fire even after Iran seized ships in the Persian Gulf. Tehran, too, despite warning retaliation over a U.S. seizure of an Iranian tanker, has not followed through. Both sides have remained diplomatically engaged through Pakistan. The alternative to diplomacy is disaster. The U.S. and Israel bombed Iran for 40 days but failed to secure a favourable strategic outcome, and the global economic fallout of this illegal war is now being felt. For diplomacy to succeed, Mr. Trump and the Iranian leadership should adopt a phased approach. Rather than acting as if the war has not changed the region’s strategic realities, the U.S. should offer tangible concessions to Iran in return for compromises on core issues. Iran has demonstrated a measure of deterrence by asserting control over the Strait of Hormuz. But if it continues to disrupt commercial traffic, further damaging the global economy, it risks squandering the goodwill it enjoys as the underdog. A practical first step would be reciprocal de-escalation: the U.S. lifting its blockade and Iran reopening the Strait to commercial shipping. This would also reinforce the fragile ceasefire and build confidence, paving the way for the next round of direct talks on outstanding issues, including the nuclear programme.