Oil prices fell sharply after the United States and Iran paused attacks, offering Luxembourg potential relief on fuel, inflation and financial markets. Hormuz shipping, however, remains restricted.
Brent crude has settled above $100 again as attacks threaten two Middle Eastern shipping routes. Luxembourg’s import dependence makes fuel, heating, inflation and interest rates especially sensitive to a prolonged disruption.
Oman, Qatar and Pakistan raced this weekend to revive US-Iran diplomacy after Donald Trump declared the ceasefire over following two nights of American strikes, with control of the Strait of Hormuz the central dispute.
Iran buried assassinated supreme leader Ali Khamenei at the Imam Reza shrine, closing a vast state funeral clouded by an unresolved succession: his proclaimed heir, Mojtaba Khamenei, remains unseen.
Iran's Revolutionary Guard fired at least two missiles at commercial ships crossing the Strait of Hormuz overnight into 7 July, striking a Qatari LNG carrier and setting it on fire. Two vessels were badly damaged but no casualties were reported. The strikes are the first in the chokepoint since a US-Iran truce took hold in June, and pushed crude prices higher as Europe watches its energy lifeline.
The United States and Iran concluded two days of indirect, Qatari- and Pakistani-mediated talks in Doha on 2 July without resolving control of the Strait of Hormuz, the chokepoint for about a quarter of seaborne oil. The round focused on maritime traffic and unfreezing Iranian funds under June's Islamabad Memorandum. Oil fell to four-month lows, and the next round awaits the six-day funeral of Ayatollah Ali Khamenei, as his son and successor Mojtaba Khamenei consolidates power.
Iran began six days of funeral ceremonies for Ali Khamenei on 3 July, four months after the supreme leader was assassinated in the opening hours of the US–Israeli war. Officials expect crowds in the tens of millions before his burial in Mashhad on 9 July, while his son and successor Mojtaba Khamenei — chosen by the Assembly of Experts in March — has yet to appear in public. US–Iran talks in Doha are paused for the funeral, and oil prices have fallen back to near pre-war levels.
A senior US official says Washington and Tehran have agreed to stop attacking each other and return to talks in Doha on 30 June, a de-escalation that has steadied oil prices and drawn cautious EU welcome.
A renewed tanker strike and US retaliation have tested the June ceasefire between Washington and Tehran, leaving the six Gulf monarchies to mediate, hedge and absorb the risks to oil flows and European energy security.
Iran's parliament speaker and lead negotiator, Mohammad Bagher Ghalibaf, called the US-brokered deal that ended the 2026 Iran war 'a declaration of America's defeat.' The Pakistan-mediated Islamabad Memorandum trades an end to US and Israeli strikes and sanctions relief for Iranian curbs on uranium enrichment — but a clash over IAEA inspections, and a split between Tehran's pragmatists and hardliners, leaves the peace untested. For Europe, the payoff is already visible in falling crude prices.
US and Iranian delegations meeting at the Bürgenstock resort above Lake Lucerne agreed what mediators Qatar and Pakistan called a roadmap toward a final deal within 60 days, including a Strait of Hormuz communication line, a Lebanon de-confliction cell and the return of IAEA inspectors. The diplomacy unfolded as President Trump publicly threatened fresh strikes, leaving the core nuclear and sanctions questions unresolved and oil markets watching the Gulf.
Washington has issued a 60-day general licence authorising the sale of Iranian crude, the first such opening since 2018. The move, tied to an interim deal over the Strait of Hormuz, pushed Brent lower and could ease Europe's energy-driven inflation.
A renewed US-, Qatari- and Iranian-mediated truce halted the deadliest flare-up along the Israel-Lebanon frontier as negotiators prepared to reconvene the week of 22 June, though Hezbollah's rejection of disarmament terms and Israel's refusal to leave a buffer zone keep a comprehensive settlement out of reach.
The first round of formal U.S.-Iran post-ceasefire talks ended at the Bürgenstock resort with a road map toward a final deal in 60 days, sending oil lower and equities higher even as the enrichment dispute remained unresolved.
Luxembourg's parliament has begun examining the €432.5 million Resilienzpak energy-relief package, even as a looming US-Iran deal pushes oil prices to their lowest since March.