Trump has publicly rejected Iran's proposed seven-day plan to reopen the Strait of Hormuz, yet the negotiations have not ended there. Qatar has resumed relaying messages between Washington and Tehran, with the focus shifting to a revised framework, and Iran is now waiting for a final US reply on Tuesday. Iran says it expects the United States to deliver a formal response on Tuesday local time regarding the latest proposal to reopen the Strait of Hormuz.
Although US President Trump had already publicly turned down the seven-day plan put forward by Tehran, the two sides are still in indirect contact through Qatar, and the focus of the talks has shifted to a modified ceasefire framework. Uncertainty surrounding the negotiations continues to push international oil prices higher. On Tuesday, crude prices rose for a second straight session, and even though Middle East crude exports have recently recovered markedly, the market is still pricing in a risk premium for the Strait of Hormuz situation and the outlook for US-Iran talks.
Qatar resumes mediation as Iran waits for a final US answer
Iranian Foreign Minister Abbas Araghchi said late Monday that Qatari mediators had presented some ideas to Iran, the two sides discussed them, and Qatar would then communicate again with the US side and relay Washington's final answer back to Tehran. Araghchi, who is in New York for events related to the United Nations General Assembly, said Qatar hopes the process can be completed on Tuesday. He said he would remain in New York until a reply is received and then plans to return to Tehran.
According to Reuters, Qatari mediators held talks with Iranian and US officials on Monday and Tuesday this week, focusing on a revised version of the seven-day plan Iran proposed during the UN General Assembly last week. Trump has previously confirmed that the United States had contact with Iran through mediators but did not disclose details of the negotiations. Iran's original proposal called for the United States to release frozen Iranian funds within days, lift sanctions on Iranian oil, and end the naval blockade of Iranian ports. Iran would then allow the Strait of Hormuz to reopen, and the two sides would resume nuclear talks within seven days. Reuters previously reported that the plan also involved halting hostilities in Iran and Lebanon. Iran insists on linking the reopening of the Strait of Hormuz directly to those conditions.
Trump publicly rejected the plan over the weekend, saying Iran's desire for a quick deal stems from the economic pressure it faces. However, he later said he expected US negotiators to continue taking part in related discussions this week. Araghchi said mediators had not formally conveyed the final US decision to reject the plan to Iran, so Tehran is still waiting for Washington's clear position.
Oil prices climb again, but Middle East crude exports have already recovered significantly
As the negotiations enter a new waiting period, international oil prices have risen again. Sally Auld, chief economist at NAB, said there is still a clear gap between the US and Iranian positions on a ceasefire and the reopening of the Strait of Hormuz, and Iran remains committed to its earlier proposal. Beyond the outlook for the talks, a possible US restriction on diesel exports, disrupted refining capacity, and Middle East shipping risks all continue to support short-term oil prices. However, physical crude supply conditions have been improving recently. Kpler data shows that Middle East crude exports have recovered to near their highest level since the conflict broke out in February, with crude flows through the Strait of Hormuz and alternative routes last week equivalent to about 80% of the region's pre-war export level.
The Wall Street Journal, citing ship-tracking agency Huax, reported that so far in September, major Middle East producers such as Saudi Arabia, Iraq, and the UAE have exported nearly 13 million barrels per day of crude through the Strait of Hormuz and alternative routes, the highest since February. At that time, regional exports were close to 19 million barrels per day. Earlier, US Energy Secretary Wright also said on September 27 that US forces are helping oil, natural gas, and fertilizer move through the Strait of Hormuz, with daily volumes that day approaching 13 million barrels. Saudi Arabia has also restored about half the capacity of its East-West pipeline. That pipeline can bypass the Strait of Hormuz and carry crude to the Red Sea coast. Bloomberg, citing people familiar with the matter, reported that pipeline flows have now reached at least 3.5 million barrels per day.
But overall traffic through the Strait of Hormuz remains far below pre-war levels. Kpler real-time data says total volumes passing through the strait last Saturday were about 10.59 million barrels per day, compared with a pre-war baseline of about 17.13 million barrels per day. Iran itself is under greater pressure. After the United States reimposed a naval blockade in July, Iran has struggled to ship newly loaded crude through the Strait of Hormuz. Kpler estimates that Iranian crude inventories previously stored on tankers outside the blockade line have fallen from about 29 million barrels in early September to about 15 million barrels, and at the current pace could be largely depleted by mid-October.
The recovery in Middle East exports has temporarily eased global supply pressure, but it has not yet removed oil prices' sensitivity to the negotiations and the security of the strait. The Strait of Hormuz carries about one-fifth of the world's oil shipments, and as long as the US and Iran cannot reach an agreement on a ceasefire, sanctions, the port blockade, and reopening the strait, shifts in the situation could still quickly feed through to international crude markets.
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