Will Iran agree to transfer nuclear dust to China and sign a peace deal with Trump?
·
Although the Iran war may be over, the Strait of
Hormuz double blockade continues, and Iran is not ready to sign any deal with
Trump at gunpoint.
·
Ahead of the Nov '26 midterm election, Trump is not
ready to launch another wave of an all-out war against Iran, and the US may also
be short of missiles.
· Trump is now looking for a face-saving exit from his Iran war mess and may blink first by allowing China to be a caretaker of Iran’s nuclear dust.
Although the Iran war may already be over, the Strait of Hormuz (SOH) double blockade—the real pain of over two months of Middle East tension—is far from over. Although the US is theoretically the biggest beneficiary of the Iran war, as it’s the biggest producer of both oil and military equipment, the economy is suffering from gas and fertilizer prices. The cost of living for ordinary Americans is soaring, and Trump may have already lost the midterm election (Nov '26)─the House and the Trifecta (majority). This, along with adverse public opinion against Iran's war on a perceived ‘nuclear’ threat and depleted missile and other military hardware stocks, means Trump may not launch another full-scale Iran war, at least before the Nov. '26 US midterm election.
Now, Trump is basically trying for a face-saving exit from his Iran war mess due to domestic political compulsion. The same may also be almost true for Iran—it has to also make a permanent peace agreement with the Trump-led U.S. without kneeling to Trump’s bullying tactics. As a great deal maker, Trump is now trying to bully Iran and forcing it to sign a deal at gunpoint, while Iran (along with China/Russia?) may be trying to employ delay-dallying tactics until the Nov '26 election, as by then Trump’s political career may be over if the SOH double blockade lingers for the next few months to keep gas/fuel prices elevated in the U.S.
Trump is doubling down and is engaging in a war of attrition with Iran for a significant
concession, which may brighten his political prospects ahead of the Nov '26
midterm election. Trump is often contradictory in his 24/7 reality shows and
media bytes.
· Iran has been playing games
with the United States and the rest of the world for 47 years (DELAY, DELAY, DELAY!)
and then finally hit “pay dirt” when Barack Hussein Obama became president. He
was not only good to them, but he was great, actually going to their side,
jettisoning Israel and all other Allies, and giving Iran a major and very
powerful new lease on life. Hundreds of billions of dollars and 1.7 billion
dollars in green cash were flown into Tehran and handed to them on a silver
platter.
· Every bank in D.C.,
Virginia, and Maryland was emptied—It was so much money that when it arrived,
the Iranian thugs had no idea what to do with it. They had never seen money
like this, and they never will again. It was taken off the plane in suitcases
and satchels, and the Iranians couldn’t believe their luck. They finally found
the greatest SUCKER of them all, in the form of a weak and stupid American president.
He was a disaster as our "leader," but not as bad as Sleepy Joe
Biden! For 47 years, the Iranians have been “tapping” us along, keeping us
waiting, killing our people with their roadside bombs, destroying protests, and
recently wiping out 42,000 innocent, unarmed protestors, and laughing at our
now GREAT AGAIN country. They will be laughing no longer!
· I have just read the
response from Iran’s so-called "representatives." I don’t like it—TOTALLY UNACCEPTABLE! Thank you for your attention to this matter.
· On May 11, 2026, Trump says he is considering a larger
military operation against Iran by reviving Project Freedom to open the Strait
of Hormuz (SOH), adding that guiding ships through the strait would be one
small part of a broader military operation against Iran. He said Iran’s leaders
were “going to fold” in peace negotiations, according to a Fox interview.
· Further, during an Oval Office reality show on Monday, Trump said he
will shortly meet generals for "important" talks on Iran: "I am being waited on
by a large group of generals. And that's also important, having to do with the
absolutely lovely country of Iran.”
· Then, in another CBS
interview, Trump said Iran made some nuclear concessions but 'not nearly enough"—Iran''s
latest peace proposal was "bad," and Tehran had made some concessions
on its nuclear program, but “not nearly enough—It was just a bad proposal, a
stupid proposal, actually."
· The US could hit Iran
targets within a day—Iran has been defeated militarily totally. They have a
little left—we'll knock that out in about a day.
· Iran agreed to hand over enriched uranium, then backed away: Iran had agreed to allow
the US to retrieve its highly enriched uranium stockpiles but later reversed
course and did not include that commitment in a written response they sent
after four days: "They said, 'You're going to have to take it.' We were
going to go with them, but they changed their mind because they didn't put it
in the paper. So when they sent us this document that we waited four days for,
which should have taken 10 minutes to do, they agreed with us, and then they took
it back."
· In an amusing mood, Trump said the Iran ceasefire is 'on massive life
support, unbelievably weak—it had only approximately a 1% chance—the ceasefire is unbelievably weak.
I would say I would call it the weakest right now. After reading a piece of
garbage, I didn't even finish reading it. They said, "Am I going to waste
my time reading it?" I would say it's one of the weakest right now. It's
on life support—I would say the ceasefire is on massive life support, where the
doctor walks in and says, Sir, your loved one has approximately a 1% chance of
living."
· Trump on nuclear dust: Iran said that the US or China can take it out.
Iran is ready to dilute enriched uranium and rejects transfer abroad—Al
Jazeera.
As per the report, Iran is prepared to down-blend its highly enriched uranium stockpile to 3.7% and 20% levels but has refused to transfer the material outside the country, Al Jazeera reported, citing an Iranian source. The source said Washington had demanded access to Iran’s 60%-enriched uranium and pushed for a 20-year halt to enrichment, which Tehran rejected. The source also said Iran was prepared to continue enrichment under International Atomic Energy Agency supervision. The source added that Washington rejected a proposal to pay fines to Iran in exchange for war losses.
Trump to discuss Iran war options with security team—Axios
As per the Axios report, Trump will meet with his national security team on Monday to discuss the way forward in the Iran war, including the possible resumption of military action, after negotiations with Tehran deadlocked on Sunday.
Trump is leaning toward resuming the Iran war, officials tell Israel's Channel 12.
As per the report, Trump is increasingly inclined to order a resumption of military operations against Iran in some form because of frustration with Tehran’s conduct in negotiations. One Trump administration official was quoted as saying, “Trump is going to hit them a bit.” Another senior official said, “We wanted an agreement, but now everyone understands where this is heading.” Officials talking to Channel 12 said Trump had hoped to reach a deal but was surprised that Iran was unwilling to meet his demands, bringing the military option back to the forefront. The report said US VP Vance and envoy Witkoff met with Trump on Monday to discuss next steps. Before the meeting, Trump said the ceasefire was “dying.” The article added that the White House now believes Iran’s response does not allow for the hoped-for progress and that renewed military action would aim to pressure Tehran into making concessions.
Meanwhile, Iran is also hardening its stance and bargaining power. The
US has ‘no alternative’ but to accept Iran’s 14-point proposal, Ghalibaf says.
Iranian Parliament Speaker Ghalibaf said the US has “no alternative” but to accept Tehran’s 14-point proposal, warning that any other approach would lead to repeated failure and mounting costs for American taxpayers. He tweeted: "There is no alternative but to accept the rights of the Iranian people as laid out in the 14-point proposal. Any other approach will be completely inconclusive; nothing but one failure after another. The longer they drag their feet, the more American taxpayers will pay for it."
Iran also denied accepting the removal of enriched nuclear material—IRGC outlet: Iran’s proposal to the United States did not include any acceptance of removing enriched nuclear material from the country, IRGC-affiliated Tasnim reported, citing a source close to Tehran’s negotiating team. The source said Iran had also set a specific deadline for the release of its blocked funds after the US proposal said Washington would free the money without specifying a timeframe.
An Iranian lawmaker tweeted 90% enrichment is possible if attacked again.
Iran could enrich uranium to 90% purity if the country comes under another attack, parliament’s national security and foreign policy committee spokesman said on Tuesday: “One of Iran's options in the event of another attack could be 90% enrichment. We will review it in the parliament."
US-Iran talks seen hinging on Trump-Xi meeting—CNN
The CNN report said US-Iran talks are unlikely to make significant progress before President Trump meets Chinese President Xi Jinping later this week, citing a regional source close to the negotiations. The source said movement in the talks would “depend on the results of President Trump’s visit to Beijing.” The source said Iran’s Foreign Minister Araghchi was “very likely” to attend the BRICS foreign ministers’ meeting in Delhi on Thursday and Friday, the same days Trump is in Beijing. Araghchi’s presence at the BRICS meeting “is important,” CNN quoted the source as saying, adding that the foreign ministers of Saudi Arabia and Egypt may also attend. The report said Egypt and Saudi Arabia are among the countries facilitating backchannel dialogue between the US and Iran, mediated by Pakistan. “China is going to be an important player in ensuring that the dialogue continues,” the source added.
As of May 11, 2026, the
fragile ceasefire between the US and Iran hangs in precarious balance.
President Trump has described the truce as being on “massive life support” with
only a slim chance of survival following his rejection of Iran’s latest
counterproposal as “totally unacceptable” and “garbage.” At the heart of the
impasse lies Iran’s stockpile of highly enriched uranium (HEU)—so-called
‘nuclear dust’ material that could bring Tehran perilously close to
weapons-grade capability.
Reports indicate Iran has offered to dilute part of its HEU stockpile domestically to lower enrichment levels (such as 3.7% and 20%) and transfer the remainder to a third country, potentially under escrow-like conditions with return guarantees if the deal collapses. China has signaled openness to taking custody of the material as a trusted intermediary. However, deep mistrust, maximalist demands on both sides, and Iran’s insistence on retaining sovereign enrichment rights and its nuclear infrastructure continue to obstruct progress.
Current Status of US-Iran Negotiations—MOU
The US and Iran have been engaged in intensive backchannel diplomacy, primarily mediated by Pakistan with support from countries such as Egypt and others in the Gulf. A proposed one-page, 14-point Memorandum of Understanding aims to achieve several immediate objectives: a formal end to active hostilities, reopening of the Strait of Hormuz for unrestricted shipping, partial sanctions relief, and the release of frozen Iranian assets (potentially in the range of $20 billion or more) in exchange for verifiable nuclear concessions.
This MOU would serve as a bridge to a 30-day window for more comprehensive talks on Iran’s nuclear program, regional behavior, and long-term sanctions architecture. However, as of May 12, momentum has stalled. President Trump has publicly expressed frustration, stating that Iran verbally agreed to hand over enriched uranium before backtracking in its written response. Iran, conversely, describes its 14-point proposal as “reasonable and generous” and insists the US has “no alternative” but to accept its core demands.
Key sticking points include the following:
· Duration of any enrichment
moratorium (the US pushing for 12–20 years; Iran offering shorter periods (5
years) or refusing permanent limits).
· Dismantling or monitoring
of nuclear facilities (Iran rejects outright dismantling).
· Reparations or war damages
demanded by Tehran.
· Control and guarantees regarding the HEU stockpile.
The Highly Enriched Uranium (HEU) Issue
Iran is believed to possess approximately 440–970 pounds (roughly 200–440 kg) of HEU, with significant portions enriched to near 60% purity—a level that places it relatively close to the 90% threshold required for weapons. This stockpile, much of it reportedly stored in fortified underground facilities, represents Tehran’s primary leverage and greatest vulnerability in negotiations.
US Position: The Trump administration views the removal or neutralization of this HEU as a non-negotiable red line. President Trump has repeatedly stated that the US could “take it” or that Iran must hand it over, emphasizing that Iran has been “defeated militarily” and has little choice but to comply. Early proposals floated direct transfer to the United States, though this was politically and logistically sensitive.
Iranian Position: Iran has consistently rejected full surrender of its HEU or any transfer that implies defeat or permanent loss of sovereignty. In its latest counterproposal, Tehran offered a compromise: down-blending (diluting) a portion of the stockpile to lower civilian-use levels (3.7%–20%) inside Iran under international monitoring (IEA), while transferring the remainder to a neutral third country. Crucially, Iran demands guarantees that the material would be returned if the US violates the agreement or negotiations collapse. Enrichment rights themselves remain “non-negotiable” according to Iranian officials.
The China Factor
China emerges as the most
plausible third-country custodian. As Iran’s largest trading partner and a
major buyer of its oil, Beijing maintains significant leverage and trust with
Tehran while also seeking stable energy flows and influence in any potential
deal. Reports indicate China has expressed willingness to take custody of the
HEU or facilitate its down-blending, potentially storing it under international
safeguards or its own control.
This arrangement could offer face-saving benefits:
· For Iran: Material remains
accessible in theory and is held by an ally rather than the adversary (the US).
· For the US: Removes the
immediate breakout risk from Iranian soil. Trump can claim ‘victory’ ahead of the
Nov. 26 midterm elections.
· For China: Positions
Beijing as an indispensable diplomatic player, enhancing its global stature
ahead of the Trump-Xi summit. China will also get Iranian oil without any major
issues for the SOH.
However, logistical, technical, and verification challenges are substantial. Transporting HEU requires secure, highly specialized handling to prevent proliferation risks or accidents. Any deal would likely require robust International Atomic Energy Agency (IAEA) oversight, which both sides have historically viewed with suspicion at times.
Prospects for Signing the MOU
The outlook remains
uncertain and fluid. Several factors weigh against an imminent breakthrough:
· Hardened public rhetoric
from both Trump and Iranian leaders.
· Iran’s internet blackout
and domestic political considerations.
· Regional actors (Israel,
UAE/Gulf states) pushing for stricter terms.
· Upcoming US inflation data
and energy price sensitivity.
Positive signals include continued backchannel activity via Pakistan, China’s interest in de-escalation to protect its economic interests, and the mutual desire to avoid full resumption of hostilities that could spike oil prices beyond $100–120 per barrel and trigger broader regional chaos. President Trump’s upcoming meetings with Xi Jinping (May 13–15, 2026) are widely seen as pivotal. US officials hope China will use its influence to nudge Iran toward greater flexibility on the HEU issue and the MOU. Outcomes from Beijing could determine whether diplomacy advances or military options regain prominence.
Conclusions
Trump initiated his Iran war mess at the instigation of Israeli PM BB Netanyahu despite no real threat of any nukes from Iran. The real reason may be to divert public attention from Trump’s insane involvement in Epstein’s file. And BB may have also blackmailed Trump for his Epstein involvement. In either way, Trump may have made a grave political mistake, as he is the 1st US President in the last 40-years, who launched an all-out direct war against Iran amid provocation by Israel. The US military is now looking like a professional mercenary for Israel, fighting against Iran on behalf of Israel. Trump is now desperately seeking a face-saving exit from his Iran war miscalculation. Iran, indeed, fought asymmetrically—much better than expected. But at the end of the day, Iran also needs a permanent peace solution with the US.
The question now is whether Iran will transfer its highly enriched uranium to China—or any third country (like Russia)—and sign a peace MOU with the Trump administration remains unanswered as of May 12, 2026. While Iran has floated a compromise involving partial down-blending and third-country transfer (with China as a leading candidate), significant gaps persist on verification, guarantees, enrichment rights, and facility status. President Trump’s rejection of the latest proposal and characterization of the ceasefire as critically weak underscore the fragility of the moment.
China’s potential role as custodian offers a pragmatic bridge, leveraging Beijing’s relationships with both parties. Success in the forthcoming Trump-Xi summit could prove decisive, providing the diplomatic momentum needed to close gaps. Yet, deep-seated mistrust, maximalist red lines, and domestic political pressures on all sides suggest that any agreement will likely be imperfect and phased rather than comprehensive.
Trump is demanding a 20-year nuclear enrichment ban for Iran, while Iran is offering 5 years. Although
Iran and the US may agree on a 10-year nuclear enrichment ban (middle ground), Iran
may not compromise with its missile programs and the SOH leverage. It will ensure joint ownership along with
Oman for the SOH toll tax system for the reconstruction effort. But Trump may
not be in a position to accept such concessions for Iran, as it may further
damage his political prospects ahead of the November '26 midterm election,
which Trump is set to lose pathetically.
Trump is now seeking an immediate face-saving
exit from his Iran war mess. President Trump is reportedly looking for a quick
and face-saving way to end the ongoing conflict with Iran, as the war has
become increasingly problematic for his administration. According to sources
close to the situation, Trump may have initiated the military campaign against
Iran partly under pressure from Israeli Prime Minister Benjamin Netanyahu. Some
observers have even speculated that the Epstein files could have played a role
in influencing Trump’s decision.
The war was also seen as a potential strategy to divert growing
public attention away from the ongoing trade and tariff disputes, as well as
the recent Supreme Court controversies, ahead of the critical November 2026
midterm elections. However, the plan appears to have backfired. While the
conflict initially boosted military-industrial production, the sharp rise in
energy prices — particularly gasoline — has fueled higher inflation, which is
now causing more economic damage to the United States than the short-term
benefits gained from increased defense manufacturing. As a result, Trump is
said to be actively seeking an honorable exit from his “Iran war mess.”
As a part of the expected MOU, Trump may extend
the Iran ceasefire by up to 3 months, potentially until the November 2026
midterm elections. President Trump is reportedly considering extending the current ceasefire
with Iran for another 90 to 180 days. This would likely push any major
decisions or potential resumption of hostilities until closer to or after the November
2026 midterm elections. Analysts believe Trump is not in a strong position to
launch another full-scale military campaign ahead of the elections. Instead, he
is expected to use the period until October 2026 to push aggressively for what
he calls a “great Iran deal”—a comprehensive nuclear agreement that he can
present as a major diplomatic victory.
However, a significant
trust deficit exists between Iran and the United States. Iran is unwilling to
surrender under direct American pressure, particularly by allowing the
continued US naval blockade or handing over its highly enriched uranium (the
so-called “nuclear dust”) directly to Washington. One possible middle path
being discussed involves China playing a mediating role. Under this scenario,
China could take delivery of Iran’s highly enriched uranium stockpile as a
third-party guarantor. The Strait of Hormuz remains almost completely closed
under a double blockade — the US blocking it from the outside and Iran
maintaining restrictions from within. This has caused oil prices to surge
again, putting immense pressure on Trump both domestically and internationally
to reach a fair deal and reopen the vital waterway.
With gasoline prices
rising to almost $6 and inflation concerns growing, Trump is under heavy
pressure to secure a face-saving exit from the Iran conflict. Despite strong
performance in the stock market, lower energy prices are seen as politically
critical ahead of the midterms. Many observers believe Trump may ultimately be
forced to blink first to bring down oil and gasoline prices for American
voters.
As both Trump and Iran are also seeking a face-saving deal to satisfy
respective domestic political compulsions, both may approach China (as a neutral,
reliable superpower) to take care of Iran’s so-called ‘nuclear dust,' which may
pave the way for a durable nuclear deal between the US and Iran. This may also
lead to the reopening of the SOH (Chinese interest) and help to lower energy costs
for Trump (ahead of the November '26 midterm election).
But in reality, even if the SOH reopens immediately, it may take at least 6 months for the restoration of the supply chain of Middle East oil & gas,
as the underlying infrastructure needs time for restoration from Iran war-related
damages. Thus, oil may not dip much below $88-85 in the coming days, which may
not be good for net oil-importing countries and even the US, the biggest
producer & consumer of oil in the world now.
Lingering elevated oil/energy/gasoline prices and a higher cost of living
may affect US discretionary consumer spending, economic growth, and employment.
In such a scenario, both Main Street and Wall Street are bound to suffer, and
Trump is bound to capitulate first from his warmongering to his Nobel Peace
Prize narrative (‘peace through strength’). The Iran war may have already cost
the US exchequer at least $100B directly and indirectly, much more in 5 weeks of active conflict.
Trump’s Iran war may be over, but the SOH blockade is not until Iran
signs a favorable (face-saving) peace deal/MOU. Trump may not launch another full-scale
Iran war ahead of the midterm election (November '26) and FIFA-World cup
(soccer/football) in June-July '26. But Trump is also seeking a face-saving exit
from his Iran war mess. He is now basically demanding Iran surrender and
acknowledge ‘defeat’ as they have now ‘no military, air force, air defense, or
Naval force.' Trump likes to see an acknowledgement from the US media &
public that he has ‘won’ the Iran war. In the absence of that ‘winning’
narrative, Trump may again try to lift out the ‘nuclear dust’ from Iran and
declare 'victory.' But Iran may not oblige so easily this time, and if
Trump/Iran does not agree to shift the ‘nuclear dust’ to a neutral &
responsible superpower like China, then Trump may try to ‘snatch’ the nuclear
dust.
The worst of the Iran war may be over, but the SOH double blockade is not,
and the overall uncertainty & fragility remain. Although Trump may not
launch an all-out Iran war again due to various reasons, he may launch another
surgical strike on Iran’s nuclear facilities to snatch out the ‘nuclear dust’
and declare a unilateral 'victory.' As the largest producer of oil and military
equipment (industrial goods), the US may be the biggest beneficiary of the Iran
war.
Also, the global reserve currency status of USD (unlimited printing
without any big devaluation risk) and AI optimism are helping Wall Street,
although Main Street may face stagflation due to higher energy prices (oil
& gas). The lingering blockade of the SOH is more harmful for oil-importing
economies like the EU, Asia (India, Japan, and SK), and even China (despite its
huge strategic reserve and EV dominance).
Technical
outlook: DJ-30, NQ-100, SPX-500, Oil and Gold
Looking
ahead, whatever may be the narrative, technically Dow Future (CMP: 50000) now has to sustain over 50700 for a
further rally to 51000-51500 in the coming days; otherwise, sustaining below
50500/50200-50000/49500, DJ-30 may fall to 48500/48000-47600/46600 and 46000/45700*-45200*/45000
and 43800/43000-42000/39000-36800 in the coming days (base to worst-case
scenario).
Similarly,
NQ-100 Future (28700) now has
to sustain over 29200 for a further rally to 29500-30000 in the coming days;
otherwise, sustaining below 29100/28500*-28100/27800, it may fall to
27400-27000 and 26600/26300-26000/25600; NQ-100 may again fall to
24600/24400-24000/23900, and further to 23600/23300-22800/22400 and 21900-21000
in the coming days.
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• Please always consult with your personal financial advisor and do your own due diligence before any investment/trading in the capital market.
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• All views expressed in the blog are strictly personal and may not align with any organization with which I may be associated.
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