Hormuz Crisis Deepens as Iran Sets Conditions

Iran says the Strait of Hormuz will remain closed until the United States accepts Tehran’s seven-day plan, which is based on seven conditions in the Islamabad memorandum. Mohammad Bagher Ghalibaf, Iran’s parliament speaker and chief negotiator, said Washington had sent proposals through a mediator after responding to Iran’s diplomatic proposal. He warned that Iran would not accept delay or unilateral demands and said it was prepared both to fight and to negotiate. US President Donald Trump rejected Iran’s proposal to reopen the strait last week. The waterway is a major route for global energy shipments: about one-fifth of the world’s oil and natural gas travels through it in peacetime. Trump had also threatened to “annihilate” Iran in a speech to the United Nations General Assembly last month. Iranian Foreign Minister Abbas Araghchi said Tehran was serious about diplomacy as well as defending itself. Addressing foreign ambassadors and diplomats in Tehran, he urged Washington to choose diplomacy and accept Iran’s terms, while warning that Iran was more prepared than before to respond if the US resumed military action. Foreign Ministry spokesman Esmaeil Baghaei said Iran had used the UN General Assembly to present its position on ending the US-Israel war on Iran. He added that Tehran’s immediate priority was reopening the strait and restoring peace and stability there, while the United States continued to focus on nuclear talks. The Strait of Hormuz has been largely blocked and disrupted for more than seven months, since US and Israeli strikes on Iran began on February 28. The article describes the resulting maritime disruption as one of the worst in decades and notes that the conflict has created several trade chokepoints.

Iranian Foreign Minister Abbas Araghchi said on Oct. 4 that military action and additional sanctions would not resolve the conflict with the United States, arguing that only negotiations based on justice and fairness could end it. His remarks came as US-Iran talks appeared stalled and tensions remained focused on the Strait of Hormuz, a crucial route for Gulf oil and gas. A British maritime security agency reported that a tanker had been struck by an unknown projectile in the strait; its crew was safe, and no environmental damage was reported. Iran has sought to control passage through the strait since the war began, attacking vessels that transit without its authorization. The United States has responded with a blockade of Iranian ports and strikes on vessels it says violated that blockade. In indirect talks at the UN General Assembly, Iran presented seven conditions for reopening the waterway, including a regional ceasefire, the release of frozen Iranian assets, the removal of oil-sector sanctions, and an end to the US naval blockade. President Donald Trump rejected the proposal but left open the possibility of further talks or renewed military action. Iran said the US counterproposal focused on nuclear issues, while Tehran’s priority was the strait and the restoration of Iranian commercial maritime traffic. The article says the US and Israel initially justified the war as necessary to prevent Iran from obtaining nuclear weapons, an ambition Tehran denies. The conflict’s focus shifted toward reopening Hormuz after its closure disrupted global energy markets. Although the US had not struck Iran since Sept. 11, it was reinforcing its regional military presence. Reports said additional Patriot missile batteries were sent to Saudi Arabia and Qatar, while an aircraft carrier strike group was heading to the Middle East to join two already there. Senior Trump administration officials also discussed the Iran war and Yemen, where Iran-backed Houthis have fought government forces and attacked Saudi Arabia.

Iran says the Strait of Hormuz will remain closed until seven conditions in a June framework agreement, known as the Islamabad memorandum of understanding, are met. Parliament Speaker and lead negotiator Mohammad Baqer Ghalibaf said US proposals delivered through intermediaries conflicted with public statements by US leaders, while describing Iran’s position as definitive. Tehran has called for an end to the fighting, the lifting of a US naval blockade, the release of frozen assets and sanctions relief. Ghalibaf said Iran would continue diplomacy while preparing for war. Indirect talks between Iran and the United States have stalled publicly, but backchannel diplomacy reportedly continues through Qatar. A Tehran source told The National that Iran was preparing for a major round of fighting and assessed that war was likely to resume, though the door to diplomacy remained open. The US, the source said, had not abandoned the military option. At the UN General Assembly in New York, Iranian Foreign Minister Abbas Araghchi held Qatar-mediated talks with US envoys Steve Witkoff and Jared Kushner, but they produced no breakthrough. Araghchi also submitted a proposal under which Iran would reopen the strait and resume negotiations if conditions were met. As a possible nuclear concession, Iran offered to dilute its uranium stockpile enriched to 60 per cent and transfer it to a third party under mechanisms recognised by the International Atomic Energy Agency. The article also reports that the UAE continues to seek a peaceful resolution to its dispute with Iran over the islands of Greater Tunb, Lesser Tunb and Abu Musa, through bilateral talks or the International Court of Justice. Separately, Iran’s Quds Force commander described the US withdrawal from Iraq as a victory and said Tehran-backed groups would retain a role there. Iraq’s plans to bring militia weapons under state control remain uncertain; a disarmament deadline has been postponed to June next year, and Kataib Hezbollah denies reaching an agreement with the Iraqi government.

Opec+ has kept its oil production targets unchanged for November, extending a pause on output increases for a second month. The decision was made by the group’s seven core members: Saudi Arabia, Iraq, Kuwait, Oman, Algeria, Russia and Kazakhstan. Their combined November quota is 31 million barrels per day. The pause follows six months of gradual increases, and comes after the group completed the unwinding of 1.65 million barrels per day in voluntary cuts in September. A further two million barrels per day of cuts, agreed in 2022, remains in place until the end of 2026. Most of the seven members are producing below their quotas because of the war and disruptions to exports. The Strait of Hormuz, a vital route that carries roughly one-fifth of global crude oil and liquefied natural gas supplies, has been effectively closed since US-Iran fighting began on February 28. The group is reviewing members’ production capacity to determine quotas for 2027 and plans to continue monthly meetings to assess market conditions. Its next meeting is scheduled for November 1. The article also describes stalled indirect talks between Iran and the US. Iran says the Strait will not reopen until seven conditions are met. Parliament Speaker and lead negotiator Mohammad Bagher Ghalibaf said US proposals sent through intermediaries conflicted with public statements by US leaders, while insisting Iran’s position was clear. Tehran has called for an end to the fighting, an end to the US naval blockade, the release of frozen assets and sanctions relief. Oil prices remained high but fell over the week. Brent crude settled nearly unchanged on Friday at $102.25 a barrel, while US benchmark West Texas Intermediate fell 1.9 per cent to $91.11. Brent was down nearly 2 per cent from the previous week’s close, and WTI was down 1.4 per cent. Prices had reached an intraday high of $126 a barrel in late April.

At least two vessels were struck in waters near Oman and Iran over the weekend, according to the United Kingdom Maritime Trade Operations Centre (UKMTO). One crude oil tanker was reportedly hit by an unknown projectile four nautical miles east of Oman on Saturday; a second tanker was struck in the Strait of Hormuz on Sunday, damaging its engine room. Attacks on shipping through the strait have occurred regularly for weeks. Before the U.S. and Israel-led war began on February 28, the route carried about one-fifth of the world’s oil supplies. Iranian Parliament Speaker Mohammad Bagher Ghalibaf said the Strait of Hormuz would remain closed until Iran’s seven conditions, based on the Islamabad Memorandum, are met. The conditions Tehran has outlined include ending U.S. acts of aggression, lifting the naval blockade of Iranian ports and economic pressure, and releasing Iranian assets. The United States has demanded that Iran dismantle its nuclear weapons program. An interim agreement signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian in June had briefly paused the fighting. Separately, Yemen’s Iran-aligned Houthis said they targeted an Aramco facility in Riyadh with missiles and drones, describing the attack as retaliation for Saudi strikes in Yemen. Reuters reported a witness saw smoke and fire at the site, but Saudi authorities had not commented and Aramco had not responded to CNBC’s request for comment. If confirmed, the strike would mark a further escalation and a second front in the conflict. Investor and analyst Bader Al-Saif said he expected full-scale fighting to resume, describing it as a question of when rather than if. The attacks and risk of escalation have raised energy prices, inflation expectations, and government borrowing costs. Reports that the U.S. was sending another aircraft carrier strike group and 2,000 Marines to the region lifted crude prices on Thursday, while G7 plans to release diesel and crude stocks helped prices ease on Friday. Brent closed at $102.25 a barrel and U.S. West Texas Intermediate at $91.11.