US, Iran Weigh Phased Deal to Reopen Strait of Hormuz, Lift Blockade

US and Iranian negotiators meeting in New York are floating a phased de-escalation that would swap open shipping lanes for sanctions relief. Sources close to the talks told Reuters the arrangement would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.

The core trade-off

The strait has become the central bargaining chip in efforts to end the nearly seven-month US-Iran conflict, with Iran seeking relief from the US blockade that is choking its economy and Washington seeking free passage for ships on the global oil supply route now blocked by Tehran.

Talks face a big obstacle as neither side wants to be the first to surrender its leverage, according to two Iranian sources, two regional officials and two Western diplomatic sources, but behind Iran’s stance is a recognition of the economic cost of prolonged confrontation.

Tehran’s tone is not soft

Even as diplomats sketch an off-ramp, Iran is signaling it is ready to keep fighting. Tehran is preparing for the possibility of renewed war with Washington, an Iranian official said, accusing the US of using the economic blockade and threat of force as tools of coercion.

A senior Iranian official told Reuters, “Our fingers are on the trigger,” adding that “the Americans know what they need to do but, because of their excessive demands, the chances of diplomacy resolving this are extremely low.”

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Transit fees and Gulf pushback

Regional sources said Tehran was willing to drop a demand for payment of transit fees to use the Strait of Hormuz from the main agreement and put the demand in a side attachment instead, as ending the blockade had become the more urgent priority.

Gulf states have rejected the proposal for payment of transit fees, and any arrangement would be temporary, not a formal abandonment of Iran’s position, the regional sources said.

Why it matters for markets

Roughly a fifth of global oil moves through Hormuz. A credible reopening would ease the war-risk premium in crude, weigh on tanker rates, and take some bid out of defense names. A collapse of talks does the opposite.

A Western official familiar with the talks said, “It is all about opening the Strait of Hormuz. We’re all under pressure domestically and the Iranians know that.”

Options market and stocks to watch

Watch for repricing across energy, tankers, and defense if headlines swing either way:

• XOM and CVX — integrated majors most sensitive to a crude war-premium unwind.
• USO — the crude ETF is the cleanest read on how traders are pricing a Hormuz reopening.
• FRO — tanker rates spiked on the closure; watch for a fade if safe passage returns.
• LMT and RTX — defense primes could give back some of the geopolitical bid on a durable ceasefire.

Follow related market and geopolitics coverage for updates as the talks progress.

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