The U.S. is waiting on whether Iran will take part in a second round of talks before a ceasefire expires on Wednesday, with the sides deadlocked on how to end a war that’s engulfed the Middle East and triggered a growing energy crisis.

U.S. President Donald Trump said his vice president, JD Vance, is ready to leave for negotiations in Pakistan, but threatened to resume the country’s military operation if Iran doesn’t make a deal.

For its part, Tehran has yet to confirm its attendance in Islamabad. Parliament Speaker Mohammad Bagher Ghalibaf, who led Iran’s delegation during the first round of talks earlier this month, said his country would not “accept negotiations under the shadow of threats.”

Trump said he’s “not going to be rushed into making a bad deal” and that a U.S. naval blockade on Iranian ports would stay in place “until a deal is signed.” He’s unlikely to agree to extend the ceasefire beyond late Wednesday U.S. time, he said in an interview on Monday.

“There’s going to be a meeting,” he said. “And it can work out well.”

Ghalibaf has similarly said the Strait of Hormuz — a critical waterway for global energy supplies — will remain closed to most commercial traffic for now, as it has since just after the start of the war on Feb. 28.

The standoff underscores the uncertainty surrounding fresh talks, even after Trump said negotiations could begin as early as Tuesday. The U.S. president has threatened strikes on Iran’s power infrastructure if diplomacy fails.

A pause in hostilities has mostly held for two weeks after a conflict that raged for more than a month, hurting Trump politically and leading to fears of faster inflation and slower economic growth across the world.

It’s possible the sides reach a preliminary agreement to reopen Hormuz and end the U.S. blockade, while leaving longer-term issues related to Iran’s nuclear and missile program to be resolved in later talks.

Trump’s optimism contrasts with the tone of Iranian officials, a difference that became more pronounced after the U.S. intercepted and seized an Iranian-flagged cargo vessel on Sunday. Iran said last week it would reopen the Strait of Hormuz — through which about a fifth of the world’s oil and liquefied natural gas exports flowed before the war — only to reverse the decision hours later as the blockade on its own ships persisted.

Iranian officials have stopped short of ruling out participation in the talks in Pakistan, reinforcing expectations that both sides are continuing to explore a deal. The conflict began when the U.S. and Israel launched airstrikes on Iran, saying it was necessary to prevent the Islamic Republic building a nuclear bomb. Iran retaliated with attacks on Israel and Gulf Arab states, as well as on some ships in the Persian Gulf, effectively closing the Hormuz strait.

Oil fell slightly on Tuesday to just under $95 a barrel and is about a third more costly than before the war began. Prices don’t yet reflect the scale of the supply disruption caused by the Hormuz closure, analysts said, a situation that will only worsen the longer a deal remains elusive.

“The scale seems to be something where the market can’t actually get its head around it,” Trafigura Group’s Chief Economist Saad Rahim said at the FT Commodities Global Summit in Lausanne.

Frederic Lasserre, head of analysis at trader Gunvor Group, said if the war persists for another month, oil markets will hit tank bottoms — a phrase that means markets run out of stockpiles.

Beyond Hormuz, another fraught issue is Iran’s nuclear program. Trump has demanded that Iran forswear any ambitions for a nuclear weapon and hand over stockpiles of enriched uranium. Tehran has balked at giving up its uranium and has said its nuclear program is for peaceful purposes.

Trump and advisers see his varying comments about what might happen if the ceasefire deadline lapses as creating strategic ambiguity that the U.S. could exploit in talks, said a White House official, who requested anonymity to describe internal thinking.

Yet that uncertainty could create misunderstandings with Iranian negotiators, who are also grappling with internal divisions among the country’s leaders.

Conservative elements within the Iranian government and military leadership, including those at the top of the Islamic Revolutionary Guard Corps, have taken the continuation of the U.S. blockade as a further signal that Trump can’t be trusted, according to U.S. and Iranian officials.

The IRGC’s leader, Ahmad Vahidi, is pushing for a tough negotiating stance, people familiar with the dynamics said.

There is a divide between the likes of Vahidi and less ideological figures, such as President Masoud Pezeshkian and Foreign Minister Abbas Araghchi, who are more inclined to reach an accord with Washington, said the U.S. and Iranian officials, asking not to be named because of the sensitivity of the matter.

Trump is also facing pressure at home to end the war, with polls showing most Americans disapprove of the conflict. The president campaigned on keeping the U.S. out of foreign entanglements and lowering consumer prices, two pledges strained by his decision to start the war.

He has sought to assuage those worries, insisting that fuel prices will fall quickly once the war ends and that the U.S. is not embroiled in a years-long conflict. U.S. gasoline pump prices have risen above $4 a gallon on average — the highest level in almost four years — and Trump’s energy secretary, Chris Wright, said they might remain at $3 or more until next year.

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—With assistance from Elaine To, Thomas Hall, Jon Herskovitz and Arsalan Shahla.

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