The fragile ceasefire between the United States and Iran appears to have fallen apart over continued strife over the Strait of Hormuz, as Iranians buried their supreme leader, killed at the outset of the war.
A U.S. official told USA TODAY that President Donald Trump regards Iran’s recent attacks on commercial vessels in the critical shipping lane as “acts of terrorism.” But the official added that negotiations have not completely fallen apart, saying that the “United States is still committed to finding a resolution, and technical talks continue.”
Iranian officials have not given indications in public statements that talks remain underway. The country has been absorbed by Ayatollah Ali Khamenei‘s burial Thursday at one of the holiest sites for adherents of Shia Islam, where attendees carried signs offering $100 million for Trump’s assassination. Experts have said locals are paid to appear at the demonstrations.
The war has rocked the global economy since it was launched on Feb. 28. Global fuel prices have fallen somewhat amid the on-again, off-again ceasefire. But continued attacks threaten to drive prices back up again.
Grief and destruction in the Middle East amid Iran War ceasefire
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See the trail of devastation and grief left by the Iran War that began on Feb. 28, 2026, when the United States and Israel launched joint airstrikes, known as Operation Epic Fury, targeting Iranian military and government sites.
Pictured here, smoke rises in southern Lebanon following Israeli strike after a senior Israeli official told Reuters on Friday that Israel and Hezbollah were in a ceasefire, as long as Hezbollah does not attack Israel, as seen from the Israeli side of the Israel-Lebanon border, in northern Israel, June 20, 2026.
(Avi Ohayon, Reuters)IEA says lasting peace agreement a ‘must’ for oil markets
08:33 AM ET, July 10 2026
A recovery in world oil demand is underway, the International Energy Agency said Friday, but renewed U.S.-Iran hostilities this week and disrupted traffic in the Strait of Hormuz could change its outlook for an oil market surplus next year.
“While the global oil market balance looks set to swing back to surplus towards the end of the year, the forecast hinges on the assumption that tanker flows through the Strait will gradually recover,” the International Energy Agency said in a report. “Renewed exchanges of fire in the Gulf this week highlight the risks of not reaching a lasting peace agreement, which is a must for the normalisation in oil markets.”
Crude oil stood above $72 a barrel on Friday morning, remaining on track for a weekly gain of nearly 5%, according to Trading Economics. The national average price for a gallon of regular gasoline inched up again on Friday to $3.88, up from $3.85 the day before, according to AAA.
US official: ‘Technical talks continue’
07:12 AM ET, July 10 2026, Michael Loria
A U.S. official told USA TODAY that negotiations with Iran continue on some level.
“The United States is still committed to finding a resolution, and technical talks continue,” the U.S. official said. “Iran can never possess a nuclear weapon.”
Iranian officials did not immediately publicly confirm U.S. officials’ claim that talks were ongoing.
“The MOU is performance-based, and Iran’s actions constitute failed performance at an unacceptable level,” the U.S. official added.
Supreme leader buried
07:02 AM ET, July 10 2026, Michael Loria
Mourners gather around a vehicle transporting the coffin of Iran’s late Supreme Leader Ayatollah Ali Khamenei, who was killed on February 28 in Israeli and U.S. airstrikes, and coffins of his family members, on the day of his burial, in a culmination of a mass funeral, in Mashhad, Iran, July 9, 2026.
Ayatollah Ali Khamenei, the longtime supreme leader in Iran who was killed in U.S.-Israeli airstrikes at the outset of the war, has been buried, according to Iranian state media.
The former leader of the Islamic Republic was buried in Mashhad in northeastern Iran beside the shrine of Imam Reza, state media reported. The site is considered one of the holiest among adherents of Shia Islam.
Khamenei became the second supreme leader of the Islamic Republic of Iran in 1989.
This article originally appeared on USA TODAY: US, Iran tensions remain high amid Strait of Hormuz standoff. Updates