US and Iranian negotiators meeting in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, according to a Reuters report published Thursday, September 24, citing sources close to the talks.
Why the Strait Is the Central Bargaining Chip
The strait has become the pivotal point of leverage in efforts to end the nearly seven-month conflict, with Iran seeking relief from the US economic blockade choking its economy, and Washington seeking free passage for ships along the global oil supply route that Tehran has kept blocked.
What a Phased Deal Might Look Like
A senior Iranian official said the most plausible way to end the impasse would be a phased arrangement: Iran would allow navigation through Hormuz in exchange for the US lifting its economic blockade, with Tehran potentially gaining access to frozen assets as part of the deal. "One way forward would be to solve the crisis in stages. The first would be to end the blockade and reopen Hormuz," the official said, speaking on the sidelines of the UN General Assembly.
The Trust Problem
The talks face a significant obstacle: neither side wants to be the first to surrender its leverage, according to two Iranian sources, two regional officials, and two Western diplomatic sources who spoke to Reuters. Washington controls the economic pressure weighing on Tehran, while Iran controls access to the critical energy chokepoint — meaning each side is wary of giving up its bargaining position before securing something concrete in return. A senior European official said Iran "have a very long list of demands."
Why an Earlier Deal Already Failed Once
This isn't the first attempted resolution of the Hormuz standoff. In early April, following Pakistani mediation, the US and Iran agreed to a two-week ceasefire just before a Trump deadline to escalate strikes further, with Iran agreeing to temporarily reopen Hormuz as part of that arrangement. Iranian Foreign Minister Abbas Araghchi confirmed at the time: "For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran's Armed Forces and with due consideration of technical limitations." That understanding ultimately collapsed in July, meaning any new phased deal would require President Donald Trump to accept "another temporary fix" after the earlier arrangement fell apart.
Why Iran Is Even at the Table
Despite Tehran's tough public rhetoric throughout the conflict, the sources indicated Iran's willingness to negotiate reflects a genuine recognition of the economic cost of prolonged confrontation — the ongoing blockade has been squeezing Iran's economy for months, giving Tehran real incentive to find a path toward relief even as it continues publicly demanding sanctions relief, an end to the blockade, and compensation for damages.
Trump's Own Timeline Expectations
President Trump has said he believes the US and Iran could reach a deal after the November 3 midterm elections — a timeline that suggests the administration may not be prioritizing a rapid breakthrough before then, even as negotiators continue working through the phased framework in the meantime.
Skepticism From a Former US Negotiator
Former US negotiator Dennis Ross offered a notably skeptical read on the prospects for a durable arrangement, according to the Reuters report — reflecting broader uncertainty among experienced diplomats about whether this latest round of talks can succeed where the earlier April-to-July arrangement ultimately failed.
Oil Markets Unmoved So Far
Despite the reported progress in talks, oil prices actually climbed on Thursday afternoon, with no agreement yet reached and the broader standoff between the US and Iran remaining unresolved — a sign that traders are treating the reported negotiations with caution rather than pricing in an imminent resolution.
The Core Challenge Going Forward
As the Reuters sources put it, the central challenge facing negotiators isn't just sketching out a deal in the abstract, but ensuring any concessions are durable enough for both sides to trust — precisely the issue that undermined the earlier April ceasefire once diplomatic momentum stalled over the summer.
What's Next
With talks ongoing in New York and no agreement yet reached, the coming weeks will reveal whether this phased framework can survive the same trust deficit that doomed the earlier arrangement, or whether both sides can find enough common ground to produce a more lasting resolution before Trump's expected post-midterm timeline. For continuing coverage, see the full Reuters report.