Iran’s supreme leader restates Tehran’s conditions to end the war as oil eases on diplomacy hopes

Iran’s Supreme Leader Mojtaba Khamenei reiterated Iran’s conditions for ending the war with the United States during a meeting with his security chief, Mohsen Rezaei². Rezaei, who heads Iran’s Security Council, met the supreme leader on Tuesday after talks with Mecca pact countries¹.

Khamenei called for ensuring that Tehran’s conditions are met to end the war, according to an official statement⁴. He urged fulfilment of Tehran’s terms after a briefing from Rezaei⁵. He also called for safeguarding Iran’s rights, according to the statement released on Tuesday³. Iran said the two men discussed regional security and the Strait of Hormuz⁶.

The supreme leader has not been seen in public since succeeding his father¹. His father, Ali Khamenei, was killed⁸. The meeting was reported by Iranian state media⁸.

Why it matters to investors

The statement drew a measured response in markets. A reported call by Khamenei for an end to a state of ‘neither war nor peace’ moved markets a bit, even though, to the outside world, it is not clear that he is alive⁷. The account of his views rests on Iranian news reports rather than a public appearance⁷.

Oil prices fell as traders assessed diplomacy over Iran and attacks in Saudi Arabia⁹. December Brent crude futures fell 0.8% to $114.93 a barrel, while December West Texas Intermediate futures dropped 0.9%⁹. Oil eased on hopes for Middle East diplomacy, while attacks in Saudi Arabia kept worries about supply alive¹⁰.

The war has rippled across the Middle East and placed the Strait of Hormuz at the centre of the turmoil¹⁰. Any shift in Tehran’s position on the waterway⁶ bears directly on oil supply risk.

What to watch

The statements describe the conditions without setting them out in the reports so far^4,5. Investors will watch whether the talks with Mecca pact countries¹ produce a framework that addresses those conditions, and whether the supreme leader appears in public to confirm the statements attributed to him⁷.

Even after Tuesday’s decline, Brent traded at $114.93 a barrel and WTI was also lower⁹. Traders are weighing diplomacy against continued attacks in Saudi Arabia¹⁰, and any statement on Hormuz from Tehran² would add to that calculation. The security chief’s role in the talks with Mecca pact countries¹ makes him the official to watch for the next account of Iran’s position.