President Trump dismissed Iran's latest counterproposal to end the Hormuz Strait conflict as "garbage," putting the fragile cease-fire "on massive life support." Iran, through Pakistani mediators, demanded war reparations, U.S. recognition of its sovereignty over the strategic waterway, and removal of sanctions. The counterproposal would have allowed safe passage of commercial ships through the strait, which handles one-fifth of global crude oil.

The breakdown has triggered global economic concerns. India's Prime Minister Narendra Modi urged his country's 1.4 billion residents to conserve fuel and fertilizer and cut foreign travel. In the United States, average gasoline prices have climbed to $4.55 per gallon, up more than $1.50 since the war began. Trump is considering suspending the 18.4 cents-per-gallon federal gas tax to ease consumer pain.

The war has devastated Iran's economy, with an estimated one million jobs lost and two million more unemployed. Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned the country is "prepared for all options." Analysts say the Trump administration views Iran's demands as non-starters. The deadlock casts a shadow over this week's Trump-Xi summit in Beijing, where China—the largest consumer of Iranian oil—had hoped for a resolution.