Iran offers US a seven-day plan to reopen the Strait of Hormuz through Qatari mediation

Iranian Foreign Minister Abbas Araghchi proposed a deal to the US to reopen the Strait of Hormuz within seven days if conditions are met, telling reporters at the UN in New York that the plan was delivered to the US via Qatar.

A US official told the BBC that positive discussions were taking place through mediators, including about nuclear issues. The conditions for reopening the strait are contained in a memorandum of understanding signed in June, though that framework quickly collapsed as fighting resumed. Araghchi said Iran is not in a hurry. “If the necessary conditions are met, the strait can be reopened, a normal maritime passage restored within seven days,” he told reporters.

The June framework

The MOU between the US and Iran was signed on 18 June and was designed to bring about a ceasefire and at least partly reopen the strait. The 14-point agreement said Iran would never have a nuclear weapon. It stated that the US, Iran and their allies would end military operations on “all fronts” and contained provisions including the end of a US naval blockade and sanctions relief. The MOU also said Iran would make arrangements using its best efforts for the safe passage of commercial vessels through the strait and hold talks with Oman over future shipping arrangements. It fell apart a short time later when both sides resumed strikes.

Closure and shipping disruption

The US and Israel launched air strikes on Iran on 28 February. Iran responded by attacking Israel and US bases in the Gulf and Arab Gulf allies of the US, as well as blocking the Strait of Hormuz. About 20% of the world’s oil and liquefied natural gas used to pass through the strait before the war. The US has maintained a blockade of Iranian ports, causing huge disruption to the Iranian economy. Shipping data shows a recent 10-day average of about 18 transits per day, with daily numbers dropping as low as nine vessels on certain days, according to Kpler cited by Reuters.

Markets react

West Texas Intermediate dropped 2.3% to close at $92.41 per barrel. Brent declined 2.1% to settle at $104.32. U.S. crude finished the week 7.9% lower while Brent was flat. The closure has caused wild fluctuations of energy prices.

Posturing on both sides

US President Donald Trump earlier this week threatened to “annihilate the Islamic Republic,” asking at the UN General Assembly whether a deal would be made or whether he would annihilate it quickly and drive it “into hell.” Araghchi said Iran did not accept “coercion, threats or intimidation” and that “peace cannot be built through threats of annihilation.” A US official told the BBC the US was “in a very strong position with control of the Strait of Hormuz, so we are not in a rush.” Trump said at the UN General Assembly he believed an Iran deal would come right after November’s elections. Araghchi countered that it “would be much better if it is done before the midterm election, but it depends on the U.S. administration to decide.” The conflict has increased pressure on Trump to find a way of ending it, particularly as the US heads to Congressional elections in November.

Iran will restart talks to reach a final deal if the US implements the MOU conditions, Araghchi said. Tehran is waiting for a response from the US.