At UN, 80 countries demand reopening of Hormuz, condemn Iran, Houthi attacks

US and Iranian negotiators in New York are discussing a phased deal that would involve Iran reopening the Strait of Hormuz and Washington lifting its economic blockade, according to sources close to the talks. The strait has become the central point of contention in the ongoing U.S.-Iran conflict. Iran aims to alleviate the impact of the U.S. economic sanctions that are straining its economy, while the United States seeks to restore free passage for ships through the key oil supply route now blocked by Tehran.

The negotiations face a significant hurdle, as neither side is willing to relinquish its leverage first.

Iran's negotiators recognize the economic consequences of prolonged confrontation, according to a senior Iranian official. A potential solution would be a phased arrangement, with Iran allowing navigation through Hormuz in exchange for the U.S. lifting its economic blockade. This could include Tehran gaining access to frozen assets.

To reach a durable deal, negotiators must not only outline the terms but also ensure both sides trust the concessions. U.S. President Donald Trump has expressed optimism about reaching an agreement after the midterm elections on November 3, but a senior European diplomat stated that Iran has a lengthy list of demands.

Former U.S. negotiator Dennis Ross suggested a 30% chance of agreement before the elections, but both sides might have stronger incentives to reach a deal prior to the midterms. A deal could benefit Trump by easing tensions in the Gulf, containing oil prices, and alleviating politically sensitive U.S. gasoline prices.

The leverage that brought Washington and Tehran back to negotiations could also make compromise more difficult. Washington controls the economic pressure hurting Tehran, while Tehran controls access to the critical energy chokepoint. Neither side wants to surrender its leverage without gaining something tangible in return, which may prolong the diplomatic window.

While Iran seeks a diplomatic resolution, it is preparing for the possibility of renewed war with the U.S., according to the Iranian supreme leader's advisor. Tehran accuses the U.S. of using the economic blockade and threats of force as tools of coercion, with its fingers on the trigger.

Regional sources say Iran might be willing to drop its demand for payment of transit fees to use the Strait of Hormuz from the main agreement and place it in a side attachment instead, as making the blockade the top priority has become essential. However, Gulf states have rejected the proposal for payment of transit fees.

Even as Iran seeks a diplomatic off-ramp, it remains prepared for the potential of renewed war with Washington. The Iranian official stated that the U.S. knows what it needs to do but is reluctant to act due to its excessive demands, making the diplomatic window narrow if a deal cannot be reached before the midterms.