Iran rejects ceasefire as US defense budget hits $1.5 trillion

Iran has rejected the US proposal for a temporary ceasefire and a transition to peace talks, demanding a complete and immediate end to the conflict.

On Tuesday, April 7, 2026, international developments were dominated by a sharp escalation in the Middle East, a brewing political crisis within the European Union, and massive new defense spending plans in the United States. Iran has officially rejected a U.S. proposal for a temporary ceasefire and a transition to peace talks, demanding a complete and immediate end to the conflict instead, News.Az reports, citing TASS.

With the deadline for President Donald Trump’s ultimatum to Tehran set for April 8, Washington has continued to intensify its rhetoric. The Strait of Hormuz remains a critical flashpoint as Iran refuses to reopen the strategic waterway. Meanwhile, Turkey, Egypt, and Pakistan are mediating consultations on a potential 45-day ceasefire, which is viewed as a final opportunity to prevent large-scale strikes on Iran’s civilian infrastructure and energy facilities in the Persian Gulf.

Analysts suggest that Iran's leadership currently sees no incentive for compromise, while the tight timeframe of the U.S. ultimatum reflects deep skepticism in Washington. If no agreement is reached by the deadline, the conflict may shift toward massive strikes on Iranian energy assets and limited ground operations.

Simultaneously, a significant diplomatic standoff is unfolding in Europe. The EU is reportedly preparing a plan to suspend Hungary’s voting rights in the EU Council if Prime Minister Viktor Orban wins the upcoming parliamentary elections on April 12. Such a move would allow Brussels to bypass Budapest’s veto and approve a €90 billion loan to Kyiv. While some European officials suggest sanctions could be imposed shortly after the elections, experts warn that the process requires unanimous approval from other member states, making it a difficult and legally complex precedent. Amidst this tension, U.S. Vice President JD Vance is scheduled to arrive in Budapest to support Orban during the final stage of the campaign.

In the United States, the administration has announced plans to request a record $1.5 trillion in defense spending for fiscal year 2027—a 44% increase over the previous year. These funds are earmarked for strengthening military capabilities in space, constructing the "Golden Dome" missile defense system, expanding the Navy, and advancing drone and AI technologies. To accommodate this surge, civilian and social programs may face a 10% budget cut. While the current Middle East crisis has highlighted the need for readiness, this increase is also part of a long-term trend in the rising cost of high-tech weaponry. Although aid to Ukraine is not a separate line item in this specific request, support is expected to continue through intelligence sharing and arms sales funded by European partners.

In the global energy and commodities markets, the U.S. is expected to extend sanctions exemptions for Russian oil for another 30 days. With global prices having spiked to $120 per barrel due to the Middle East conflict, Washington aims to prevent further market volatility. There are currently approximately 240 million barrels of Russian and Iranian oil at sea; removing these volumes would trigger another price surge that would be politically unacceptable for the White House. This extension also considers the needs of major trading partners like India, which has relied on these supplies for stability. However, there is no indication that these sanctions will be lifted permanently, as the U.S. maintains its long-term policy of limiting Moscow's revenues.

Finally, global prices for aluminum and copper are projected to rise sharply in 2026. Aluminum is expected to reach $3,050–$3,300 per ton, while copper could climb to nearly $13,000 per ton. These increases are driven by the conflict in the Middle East, which accounts for nearly 9% of global aluminum production, and the blockage of the Strait of Hormuz, which has paralyzed regional exports. While demand from China’s energy sector remains high, experts warn that a prolonged war could eventually lead to a global economic slowdown and a subsequent drop in overall demand for raw materials.

News.Az