US, Iran Talks Continue as Mediators Push Hormuz Deal

Regional and US officials say indirect talks are continuing on a plan to reopen the Strait of Hormuz and lift the US blockade, though disagreements over Iran's nuclear program remain unresolved.

"Illustration generated with AI, representing oil shipping through the Strait of Hormuz."

Mediators are working with both Iran and the United States on a possible deal to end the war and reopen the Strait of Hormuz, according to three regional officials and two US officials. Those officials said significant obstacles still stand in the way.

The talks are indirect, with intermediaries passing proposals between the two governments. The war is now in its eighth month. It has hurt the global economy and done heavy damage inside Iran, and earlier attempts to restore safe shipping through one of the world's most important waterways have failed.

All five officials spoke on condition of anonymity because they were not authorized to discuss the private negotiations publicly.

What the draft proposal would do

Two of the regional officials said the draft under discussion would take place in stages. The strait would reopen first, the US blockade of Iranian ports would end next, and sanctions would then be removed.

Under the draft, the strait would reopen in line with a separate arrangement Iran has been negotiating with Oman, which sits on the opposite side of the waterway. That arrangement would include no tolls, which Tehran had wanted. It is meant to manage shipping traffic temporarily in a channel that was widely treated as an international waterway before the war.

One regional official said Washington wants Iran to make concessions on its nuclear program, including allowing inspectors into the country. The two sides signed a memorandum of understanding in June that set a 60-day window for nuclear talks, but it fell apart within days.

Where Washington and Tehran stand

The renewed diplomacy follows President Donald Trump's initial rejection of an Iranian offer. Under that proposal, Iran would have reopened the strait within a week if the US lifted its blockade of Iranian ports, released frozen Iranian assets and waived sanctions on Iranian oil sales, among other conditions.

Despite Trump's often harsh public rhetoric, a senior US official said he is open to a non-military resolution if one can be reached. A second US official said the administration will not make a deal with Tehran until nuclear issues are addressed.

That official said Trump is prepared to offer sanctions relief and release some frozen funds in exchange for concrete progress on the nuclear front. Iran has signaled some flexibility on nuclear matters, the official said, but the two sides remain far apart on timing and on who would act first.

Iranian Foreign Minister Abbas Araghchi stayed in New York after last week's United Nations General Assembly. Iranian state media, citing Foreign Ministry spokesperson Esmail Baghaei, reported that he would meet Qatari mediators Monday to discuss the latest developments.

Oil prices stay high

Oil markets are following the negotiations closely. Prices rose for a second straight session Tuesday as concerns about Middle East supply outweighed signs that crude shipments from the region are recovering.

By 0326 GMT, Brent crude futures were up $1.49, or 1.4%, at $106.77 a barrel. West Texas Intermediate, the US benchmark, gained $1.34, or 1.5%, to $93.94. Both had closed the previous session nearly $1 higher.

Preliminary data from Kpler showed crude exports from major Middle Eastern producers reached 12.8 million barrels a day in September, the highest level since February. Higher shipments from Saudi Arabia and the United Arab Emirates drove the increase.

Tim Waterer, chief analyst at KCM Trade, said much of the added volume still depends on workarounds such as ship-to-ship transfers, which cost more and are less efficient than normal operations. He said that is one reason prices remain elevated. Analysts at UOB described the US-Iran standoff as the main risk for energy prices and inflation expectations. They noted reports that Iranian officials are pessimistic about reaching a deal before the situation around the strait worsens.

Officials from both countries told Reuters they spoke separately with mediators this week. Further talks are widely expected to center on an amended version of the seven-day proposal Iran presented last week on the sidelines of the UN General Assembly.

Separately, the US is weighing regulatory relief that would allow broader sales of red-dyed diesel to help ease fuel prices, people familiar with the discussions told Reuters. The change could let some buyers avoid the federal fuel tax. It emerged from several days of deliberation as a leading alternative to a diesel export ban.

Background and what comes next

The war began in late February with US and Israeli attacks on Iran. It has put the Strait of Hormuz, a key route for global oil and gas shipments, at the center of the crisis.

No agreement has been reached. The Araghchi meeting with Qatari mediators is the next confirmed step, and the parties are still divided over nuclear inspections, the timing of sanctions relief and the order of concessions.