Oil prices tumbled nearly 8% on Sunday after Iran sent a formal reply to a U.S. Proposal to end the Gaza war via Pakistani intermediaries, Iran’s state news agency IRNA reported. Pakistan confirmed it had received the Iranian reply, Al Jazeera’s Islamabad correspondent Kamal Hyder said, and markets moved on the prospect of de-escalation. Reports say any initial talks would focus on ending hostilities before addressing more fraught issues such as Tehran’s nuclear programme. The immediate question is whether and when Pakistan will transmit Iran’s response to Washington, and how the United States will react.

Iran delivered a formal reply to a U.S. Peace overture via Pakistani intermediaries, Iran’s IRNA news agency reported on Sunday, and Pakistan confirmed receipt, Al Jazeera’s Islamabad correspondent Kamal Hyder said. Hyder told Al Jazeera, "The Pakistanis are confirming that they have received the Iranian response to the US proposal," adding that the timing of Pakistan’s transmission to Washington will determine the U.S. Reaction.

Diplomatic steps focused on ending hostilities first

Multiple accounts said the expected first stage of any talks would be limited and practical. Reporting across outlets described the initial focus as an agreement to stop the fighting, with more contentious subjects, including Iran’s nuclear programme, to follow later. That sequencing is central to the calculus on all sides, because it separates immediate battlefield calm from long-term security and inspection regimes.

One detailed account in Bloomberg described Washington’s proposal as a one-page memorandum of understanding that, if accepted, would lead to a gradual reopening of the Strait of Hormuz and a lifting of U.S. Restrictions on Iranian ports, with detailed nuclear negotiations to follow. That specific formulation appears only in Bloomberg’s account.

Markets and military flare-ups shaped urgency

News of Tehran’s response triggered swift market moves. Bloomberg-cited coverage published on a financial site reported that benchmark Brent crude fell nearly 8% to $101.27 a barrel and that West Texas Intermediate fell more than 7% after the dispatch became public. European natural gas prices dropped as much as 14%, and India’s Economic Times and other outlets also noted the fall in oil prices following IRNA’s initial report.

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Those price moves reflected traders pricing in a possible de-escalation around the Gulf and the region more broadly. So far, accounts differ on whether Pakistan has already relayed Tehran’s reply to Washington. Al Jazeera reported Pakistani confirmation of receipt but didn't confirm onward transmission to the United States.

Other outlets said it was not immediately clear if Pakistan had passed the response on to Washington.

That uncertainty is political as much as logistical. Several reports point to a recent pattern of military incidents that frame the diplomacy. Outlets reported drone strikes in the Gulf that hit a freighter bound for Qatar, an attempted attack on Kuwait, and the UAE said its air defences engaged two UAVs it attributed to Iran. Other coverage cited Israeli air raids in southern Lebanon that killed at least 20 people amid the ceasefire context. Reporting across outlets placed exchanges at various points in recent months. One account said a ceasefire had been in place since April 8, even as episodic strikes continued. Other accounts described exchanges on and after February 28 that included Iranian strikes on U.S. Bases and Israeli reprisals.

Political messaging has added to market volatility. President Donald Trump was quoted as saying he was "cautiously optimistic" about the proposal. He also posted on Truth Social that "if Iran doesn’t agree to a US peace proposal, 'the bombing starts,'" remarks that both framed market moves and diplomatic urgency.

Reporting also shows contradictions on timing. One outlet cited IRNA as saying Tehran delivered its reply on Friday, while Al Jazeera and The New Arab reported the response on Sunday and Pakistan confirmed receipt. Bloomberg had earlier reported that Tehran was expected to send a reply "in the next two days." Those mismatched timelines leave open how quickly the U.S. Will be able to respond once Pakistan acts.

Analysts and officials who spoke to the press emphasized the pivotal nature of Pakistan’s next step. Across the accounts, the immediate question is procedural: will Pakistan forward Tehran’s answer to Washington, and if so when. That decision is described as pivotal for restarting formal diplomacy and for how markets, militaries and regional capitals position themselves.

For now, Britain and other Western capitals have been watching the mediation effort closely, and regional actors are parsing the response for signals about whether the ceasefire can hold while negotiators tackle the more difficult subjects later. Reuters-style detailed reporting was not the only source on the papered terms of the U.S. Proposal, which is why analysts note the need to see the text as transmitted and Washington’s subsequent reply.

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The next concrete step is whether and when Pakistan will pass Tehran’s reply to Washington. That transmission, and the U.S. Response, will be pivotal in deciding whether talks move from a first-stage truce to longer negotiations over Iran’s nuclear programme.

This article was created with AI assistance.