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China & Pakistan Issue 5-Point Peace Framework As Trump Signals Potential 'Off-Ramp' Even If Hormuz Remains Closed

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by Tyler Durden
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Summary

  • China, Pakistan issue broad five-point framework for peace (document below)

  • WarSec Hegseth saw "upcoming days will be decisive", strikes will continues without any deal

  • President Trump signals off-ramp, tells world "go get your own oil", says Iran 'decimated'

  • Isfahan, home to much of Iran's enriched uranium and a sprawling 'missile city' - was pounded hard overnight by US 2,000-pound bunker buster bombs.

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China-Pakistan Issue 5-Point Peace Framework

China and Pakistan on Tuesday issued a five-point initiative for restoring peace in the Gulf and Middle East, after Chinese Foreign Minister Wang Yi held talks with Pakistani Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar in Beijing. These countries have taken the lead, with Islamabad playing host to shuttle diplomacy - after earlier Egypt and Turkey also sent their top diplomats for a Sunday summit. In short, it is broken down according these five points and headings, laying out a broad path for Iran war ceasefire and permanent truce:

I. Immediate Cessation of Hostilities: China and Pakistan call for immediate cessation of hostilities and utmost efforts to prevent the conflict from spreading.

II. Start of peace talks as soon as possible.

III. Security of nonmilitary targets.

IV. Security of shipping lanes.

V. Primacy of the United Nations Charter.

Notably, there's nothing in here about 'denuclearization' of Iran or anything touching on what might be US-Israeli strategic aims, but instead it is quite ambiguous and broad as a proposed starting point. This comes as the US has signaled it could be open to an offramp or peace deal even if the Hormuz Strait remains under Iran's de facto control. Here is the document issued by Pakistan's official Ministry of Foreign Affairs accounts on social media:

Secretary of War Hegseth Says 'Upcoming Days Will Be Decisive', 'Damaging Iran Military Morale'

WarSec Hegseth's comments were not quite a "Mission Accomplished" but definitely a reflection on the courage and completion of "systematically destroy" Iran's military capabilities. Hegseth said he visited US troops involved in operations against Iran over the weekend, describing a campaign that is intensifying as American firepower ramps up while Iran’s capabilities decline.

He stressed that "upcoming days will be decisive," acknowledging Iran is still expected to launch missiles but adding, "we will shoot down" incoming threats. According to Hegseth, sustained US strikes are not only degrading military assets but also "damaging Iran military morale" and triggering "widespread Iran military desertions." And another key line:

"We would much prefer to get a deal. If Iran was willing to relinquish material they have and ambitions they have, open the strait, great. That's the goal. We don't want to have to do more militarily than we have to."

He went further, claiming "regime change has occurred in Iran," while warning that if Tehran refuses to make a deal, Washington will press ahead. “If Iran isn’t willing to make deal, US will continue,” he said, adding that strikes will persist "with more intensity" in the absence of an agreement.

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Off-Ramp Imminent? Trump Tells World "Go Get Your Own Oil" Via Strait After 'Decimating' Iran

There's been a lot of speculation that the White House is preparing to find a 'mission accomplished' declaration moment, as 'any offramp will do' as a way to avoid a costly potential quagmire of introducing ground troops, and we may be seeing the start of one.

After comments apparently leaked to The Wall Street Journal overnight that Trump is willing to leave Iran with the Strait unopened, the President has clarified his thinking in his out loud voice this morning.

President Trump has posted on social media this morning, clearly signaling he is further down the road towards an off-ramp:

All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you:

Number 1, buy from the U.S., we have plenty, and

Number 2, build up some delayed courage, go to the Strait, and just TAKE IT.

You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us.

Iran has been, essentially, decimated.

The hard part is done. Go get your own oil!

President DJT

The reaction was a drop in the price of oil...

...and stocks rising...

Nothing dramatic in either - as traders remain nervous of Trump-Talk still - but nevertheless, as Goldman's Rich Privorotsky noted overnight (in a seemingly precognitive comment before Trump's tweet), this is shaping up like an off-ramp:

After ~5 weeks of conflict "President Trump told aides he's willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed" (WSJ).

Politically messy (especially in GCC...less so domestically), but probably the least bad short-term pathway (can argue LT worse).

There’s a press conference at 8am EST from the Defense Department.

Overnight saw meaningful escalation… Iran struck a heavily laden oil tanker in Dubai port… a very explicit signal around control of shipping.

Likely in response to US actions around nuclear facilities in Isfahan

(Trump on his Truth Social posted uncaptioned video of large explosion 5 hours ago).

The most bullish near term outcome would be a “mission accomplished” style announcement...

i.e. nuclear capabilities set back materially (say 10–20 years), allowing the US to step away.

No edge here, frankly could be anything but will be watching.  

...

The key shift then remains the Strait.

If the US pauses while Iran maintains some level of disruption, the pressure flips… China, Korea, Japan, India, Europe and the GCC all become directly incentivized to force flows back online.

Even partial restrictions (e.g. US/Israeli vessels) are manageable…so a unilateral victory could actually restart flows and shift pressure to ROW to get strait moving. 

2,000-pound Bunker Buster Bombs Hit Isfahan Hard Overnight

Videos and reporting from the region has made clear that the central Iranian city of Isfahan has been hit very hard in the latest US-Israeli strikes. A major ammunition depot and other "military-linked" sites were attacked using 2,000-lb bunker busters. Isfahan is the Islamic Republic's third-most populous city and is believe to host majority of the nation's highly enriched uranium as well as a sprawling "missile city".

The Wall Street Journal reported that a "high volume of bunker busters, or penetrator munitions, was used for the strike" at a large ammunition depot, creating immense fireballs.

US forces have now hit more than 11,000 targets over the monthlong war, focusing heavily on degrading Iran's missile, drone, as well as nuclear power and development sites.

CBC has written, "The attacks were testament to the intensity of the month-long war the U.S. and Israel launched against Iran, as Prime Minister Benjamin Netanyahu suggested in an interview that Israel has achieved more than half of its war aims."

The heavy overnight explosions were widely recorded, being viewed for miles around:

"Isfahan is home to one of three sites earlier attacked by the U.S. military last year. NASA fire-tracking satellites suggest explosions happened in a mountainous region on the city's southern edge," the report described further, noting that Iran has yet to confirm the attack. President Trump previously warned on Truth Social, "Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately ‘Open for Business’. He continued: "we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ‘touched’."

As for the ordinance used, "bunker buster" refers to a class of bombs engineered to drive deep beneath the surface - particularly through rock, soil, or reinforced concrete - before detonating. The technology was honed and widely used by the US during the Persian Gulf War of 1991.