Iran Offers to Reopen Hormuz in Seven Days, Trump Turns It Down

Iran's foreign minister, Abbas Araghchi, presented a seven-day plan to reopen the Strait of Hormuz at a private gathering on the sidelines of the United Nations General Assembly on September 24, The Hindu reported. The terms, conveyed through Qatari mediators, call for a halt to hostilities across the region, including in Lebanon and Yemen, an end to the United States naval blockade of Iranian ports, relief from sanctions on Iranian crude exports, and the release of roughly $12 billion in frozen Iranian assets. Araghchi argued that a fast agreement would benefit Trump before the November midterm elections. Al Jazeera described the proposal as an offer to open the strait within seven days if Washington meets Iran's conditions.

Within hours, The Wall Street Journal reported that Trump had rejected the proposal. He said he doubted Tehran would meet his demands and that he expected the American military campaign to resume after the midterms. Washington's stated sequence is the reverse of Tehran's: navigation restored and nuclear talks begun first, sanctions and blockade relief second. Iranian President Masoud Pezeshkian said separately that Iran may allow inspectors from the International Atomic Energy Agency (IAEA) back onto its territory, which is the one concession that directly addresses the American demand.

Trump followed the rejection by posting an image on Truth Social showing the Strait of Hormuz labeled "Trump Strait," an early-Saturday post that the Boston Globe reported was his first public reaction to the Iranian offer. He repeated that Iran would never acquire a nuclear weapon and that a renewed American bombing campaign remained likely, according to the same report. Iranian Deputy Foreign Minister Kazem Gharibabadi responded that "the Strait of Hormuz has been Iranian, is Iranian, and will remain Iranian" and that it would be opened or closed only under Iran's own command. Tehran has also said it is still formally awaiting a United States response through diplomatic channels, despite the Journal's report of a rejection, according to the Express Tribune.

Energy markets were pricing the diplomacy, not the rejection. Front-month West Texas Intermediate crude settled near $92.50 a barrel, down about 2.2%, and Brent crude traded close to $106 a barrel after approaching $108 earlier in the week, according to reporting on the phased-deal talks. The Economic Times noted that the decline came even as Washington considered a diesel export ban and Houthi forces continued attacking shipping, two developments that push oil prices in opposite directions.

The refined-fuel picture is tighter than the crude picture. United States diesel reached about $6.53 a gallon on September 21, and distillate inventories stood at 107.9 million barrels as of September 11, according to analysis of the proposed export ban. Refiners and industry groups argue a ban would keep Gulf Coast barrels from reaching export markets and force output cuts rather than lower pump prices.