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Arab allies.

Among oil traders and diplomats, there was optimism.

“We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make a deal,” Trump said on Wednesday, adding his now habitual threat to return to bombing if Tehran refuses to back down to US demands.

Iran’s foreign ministry spokesman Esmaeil Baghaei said Tehran would communicate its position to mediator Pakistan “after finalising its views”.

But inside Iran, many were cynical about the talks.

“Neither side in these negotiations is really capable of reaching an agreement,” 42-year-old photographer Shervin told AFP reporters in Paris.

“This is another one of Trump’s games; otherwise, why are so many warships and military forces being sent toward Iran?”

According to a report from US network NBC News, Trump’s U-turn came after Saudi Arabia -- whose Crown Prince Mohammed bin Salman reportedly talked directly to Trump -- refused to allow US forces to use its airspace and bases for the Hormuz operation.

US news outlet Axios, citing two officials, reported that both Tehran and Washington were close to an agreement on a one-page memorandum of understanding to end the war and set a framework for negotiations on Iran’s nuclear programme.

Trump has claimed that Iran’s leadership is divided, in the wake of the deaths of many senior figures in US and Israeli strikes.

But President Masoud Pezeshkian yesterday said he had met with the country’s supreme leader Mojtaba Khamenei, who has not been seen in public since his appointment in early March.

“What struck me most during this meeting was the vision and the humble and sincere approach of the supreme leader of the Islamic revolution,” Pezeshkian said, in a video broadcast by state television.

Khamenei, reportedly wounded in strikes on the first day of the Middle East war that claimed the life of his father and predecessor Ali Khamenei, has released only written statements since his appointment.

Oil prices fell again, tumbling by five percent Thursday -- having fallen around 10 percent over the previous two days. International benchmark, Brent North Sea crude, shed 5.1 percent to $96.06 a barrel. The main US contract, West Texas Intermediate, lost 5.5 percent to $89.87.

Markets have been particularly concerned about the Strait of Hormuz, which in peacetime carries a fifth of the world’s oil and LNG trade as well as a good chunk of its fertiliser.