After seven months of the war, which has claimed thousands of lives and shaken the entire global energy market, Washington and Tehran are now talking again without meeting face-to-face. Both the leaders met the intermediaries on Monday in separate talks, officials from both countries confirmed. President Donald Trump simply said “American officials had had contact with mediators” and didn't say a thing beyond that.

The form of the exchange can indicate how far the respective parties are from each other. Last week, Iran put forth a seven-day agenda at the edges of the UN General Assembly. It called for an end to the conflict in Iran and Lebanon, the release of billions of dollars in frozen assets and the lifting of oil sanctions and America's blockade of Iranian ports. Only then would Tehran reopen discussions on its nuclear program and let tankers back in through the Strait of Hormuz, which includes Trump's demand that Tehran either seize or destroy highly enriched uranium. Business reports have detailed a tight timetable of the project, with money and sanction relief to come within four to five days and nuclear talks to begin within a week of the proposal.

Trump rejected it on Saturday, saying that Iran is "very desperate for a deal, very desperate, and their economy's in a lot of trouble. But the next day he said negotiators from the United States would return this week, and on Monday denied reports that he'd offered sanctions relief or frozen funds in exchange for nuclear concessions. Iran's foreign minister Abbas Araghchi, who remains in New York, stated there was no formal rejection from the United States having reached Tehran through the formal channels and Iran was awaiting Washington's "final answer. He said, that conditions in Iran have to be met to reopen Hormuz.

These two statements taken together represent a public no and a private maybe. That's a common theme in this war. In April and June the US and Iran signed ceasefires that were both breached immediately. Iran also has a reason to worry as it was targeted by the Americans during the course of diplomacy, including the February 28 attack that started this war.

Previously, it had been reported that there was a two-stage design: a ceasefire of approximately 45 days, extendable, and a larger settlement. A full reopening of Hormuz and a solution of the uranium issue can only be a factor in the second phase, according to the mediators. The proposed Iranian schedule compresses them all into just one week, making it an opening offer not a serious timetable, in the eyes of some diplomats.

The economics make sense as to why pressure is being felt in both capitals. Prior to the war, about 20% of world oil passed through the Hormuz straits. Since then, however, attacks on shipping have dropped dramatically, and were largely attributed to Iran or its allies. Brent crude is settling in around $68 in mid-February, surged above $100 in the spring and has risen approximately 60 percent so far this year, according to ING. Riding the crest of Trump's rejection, it rose above 107 dollars on Monday but tumbled on news of negotiations with a mediator and climbed back to the high nineties to low hundreds by Tuesday at various benchmarks during the day. Those swings, which can be a few dollars a day, is what a market looks like when it's trading headlines, not barrels.

The good news on the supply side is that there is some relief. Kpler tracking shows Middle Eastern crude exports have climbed back to around their best level since the war began. Saudi Aramco is operating 3.5 million barrels per day, about half the capacity, of its main East-West pipeline, which was shut last week by drone strikes. Experts warn the line will operate at reduced capacity for a number of weeks and that the Houthis are still a potential threat. There is a vulnerability in Washington. One reason for the “lowest since 1983” SPR level in August is that it was below 300 million barrels, which provides the administration with limited “room to run” should prices weaken again before the midterm elections.

But the reality is far from rosy on the global level, as the headlines on Washington and Tehran make one think. Europe and Japan are taking an increasing hit from energy prices, but struggling with slow growth. As the biggest buyer of Iranian crude, China would be more interested than anyone in the re-opening of sea lanes, and a sanctions agreement could be quietly be seen as reducing supply concerns for the Chinese. The Gulf states wish the conflict would come to an end but they would not want to enter into an hasty deal while Iran retains its power over the Hormuz port. In India, where most of the crude is imported and the cost of crude is in dollars, an increase in BRENT prices directly affects the import bill, fuel-based inflation and the rupee. New Delhi has little control over the talks, but a high degree of responsibility.

I think both leaders are playing to their own home bases, as well as to one another. Trump can't afford to pay a ceasefire with money and sanctions relief, and Tehran can't stomach a ceasefire that doesn't remove the blockade and end the blockade of its economy. When neither side is willing to blink, a deal only comes out of it when the price of waiting is even higher. The oil is at those levels, the Iranian economy is struggling and the American reserve is dwindling, and that day may be near, but it's not yet.