- US and Iran reportedly discuss phased deal to end conflict and reopen Strait of Hormuz
- Iran seeks relief from US economic blockade impacting oil exports and currency
- US wants Strait of Hormuz reopened for international shipping access
US and Iranian negotiators in New York are exploring a phased arrangement aimed at ending the nearly seven-month conflict, with a potential deal involving Iran reopening the Strait of Hormuz and the US lifting its economic blockade.
Reuters citing sources familiar with the talks reported that the Strait of Hormuz has emerged as the key bargaining point in the negotiations. Iran is seeking relief from the US economic blockade, which has hit its oil exports and access to foreign currency, while Washington wants the strategic waterway reopened to international shipping.
According to Reuters, Iranian, regional and Western diplomatic sources said neither side wants to give up its leverage before securing tangible concessions from the other.
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A senior Iranian official told Reuters that a phased agreement could offer a way out of the deadlock. Under such an arrangement, Tehran could allow navigation through the Strait of Hormuz in return for the US ending its economic blockade, with potential access to frozen Iranian assets also under discussion.
"One way forward would be to solve the crisis in stages. The first would be to end the blockade and reopen Hormuz," the official said on the sidelines of the UN General Assembly.
The US midterm elections on November 3 are also shaping the diplomatic calculations. Trump has said he believes Washington and Tehran could reach an agreement after the elections.
Reuters reported that a deal before the elections could potentially ease tensions in the Gulf and support lower oil and US gasoline prices, while Iran could seek economic relief while negotiations remain active.
Regional sources told Reuters that Iran may be willing to drop its demand for transit fees from the main agreement and instead place it in a separate attachment. Gulf states have opposed the proposal.
The sources said this would not amount to Iran abandoning its broader position on the waterway.
"Iran is not primarily focused on imposing tolls in Hormuz but on preserving its administrative control of the waterway," a source told Reuters. "Iran may be willing to defer the toll issue, but they are not going to give up administrative control of the strait."
Despite pursuing a diplomatic route, Tehran is also preparing for the possibility of renewed hostilities, according to Reuters.
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"Our fingers are on the trigger," the senior Iranian official said, while accusing Washington of using the blockade and the threat of force to pressure Iran.
The US has continued to tighten economic restrictions on Iran, including fresh sanctions targeting Iranian commercial airlines and support networks, Reuters reported.
Trump has warned that Iran's economy could "rot" unless Tehran reaches a deal.
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