US President Donald Trump on September 28 rejected Iran’s proposal to reopen the Strait of Hormuz within a week, calling reports of potential sanctions relief a “hoax.” Iran’s Foreign Minister Abbas Araghchi denied claims of flexibility on its nuclear program, stating negotiations remain focused solely on the strait’s reopening.
Trump’s rejection of Iran’s seven-day plan came after Qatari-mediated talks between Araghchi and US envoys Steve Witkoff and Jared Kushner in New York. The proposal, which Iran framed as a path to de-escalation, included conditions set by Tehran for the strait’s reopening. Trump confirmed talks would resume this week, though no timeline for a formal response was provided.
Iran’s Parliament Speaker Mohammad Bagher Ghalibaf warned on September 29 that no regional infrastructure would be safe if Iran’s security demands were not met. Ghalibaf stated, “In a region where we cannot sell oil, no one else will sell oil either; or if our security is not guaranteed, no infrastructure will remain safe.” Iran has maintained a blockade on commercial shipping through the strait since late February, when the war began with US-Israeli strikes.
Market reactions reflected the stalled diplomacy. Oil prices rose as hopes for easing tensions faded, while US stocks fell on September 28, with the S&P 500 closing down 0.8%. Analysts cited geopolitical risks and expectations of further Federal Reserve interest rate hikes as key drivers. European natural gas prices also increased, and UK diesel prices hit a record high near £2 per liter.
Iran’s leadership has repeatedly emphasized that only diplomacy can resolve the conflict. President Masoud Pezeshkian stated in a CBS interview that Iran is ready for talks but “will not accept bullying or coercion.” He reiterated Iran’s stance that it does not seek nuclear weapons but retains the right to domestic nuclear energy. Araghchi echoed this, posting on social media that “only a negotiated solution can get them out of this deadlock.”
Background and Context
The Strait of Hormuz, a critical chokepoint for global oil and gas shipments, has been a focal point of the seven-month conflict. Before the war, the strait carried one-fifth of the world’s oil and liquefied natural gas. Iran has seized or attacked multiple commercial vessels in the region since February, while the US has enforced a counterblockade to prevent Iranian oil exports.
Negotiations have stalled repeatedly since April, when a memorandum signed by Pezeshkian lapsed in August. Previous talks in Islamabad, led by Ghalibaf, failed to yield lasting agreements. The latest round of indirect US-Iran discussions, facilitated by Qatar and Pakistan, has yet to produce a breakthrough. Tehran officials have privately expressed skepticism about reaching a deal before the US midterm elections in November, according to Bloomberg.
Key Developments
- September 26: Trump rejects Iran’s seven-day Hormuz reopening plan.
- September 27: Axios reports Trump was willing to offer sanctions relief and unfreeze Iranian funds in exchange for nuclear concessions; Trump calls the report false.
- September 28: Araghchi denies any flexibility on Iran’s nuclear stance, framing talks solely around the strait’s reopening.
- September 29: Ghalibaf threatens new attacks on regional infrastructure if Iran’s security demands are unmet.
Economic and Geopolitical Implications
The impasse has heightened concerns over global energy supplies and inflationary pressures. Analysts warn that prolonged tensions could disrupt oil flows through the strait and the Bab al-Mandab Strait, another vital shipping lane controlled by Iran-backed Houthis in Yemen. Gold prices have declined from summer highs as the US dollar strengthened, making the metal more expensive for non-dollar buyers.
Next Steps
Both sides have indicated willingness to continue discussions, though no concrete agenda has been announced. Trump’s denial of sanctions relief reports suggests a hardened stance, while Iran maintains its conditions for reopening the strait. The absence of a formal response from Washington to Iran’s proposal has left markets and analysts uncertain about the path forward.