US And Iran Explore Phased Deal To Reopen Strait Of Hormuz And Lift US Blockade Of Iran

The United States and Iran are discussing a phased deal that could reopen the Strait of Hormuz and end the US economic blockade of Iran, according to sources close to the talks in New York.

Under the plan being discussed, Iran would allow ships to pass through the strait while the US would lift its economic blockade. Iran could also get access to some frozen assets.

Hormuz has become the main issue in efforts to end the nearly seven-month US-Iran conflict.

Iran wants relief from the US blockade, which has put heavy pressure on its economy. The US wants ships to move freely through the waterway, a major route for global oil supplies that is now blocked by Iran.

Neither side wants to give up its leverage first, according to two Iranian sources, two regional officials and two Western diplomatic sources who spoke to Reuters.

A senior Iranian official said a phased deal could be a way to break the deadlock.

The plan would mean US President Donald Trump accepting another temporary deal after an earlier understanding fell apart in July.

This month, Washington targeted Iran’s remaining commercial airlines and support networks. The move was part of a campaign to cut economic lifelines supporting the Iranian government and the powerful Revolutionary Guards.

Trump has warned that Iran’s economy could “rot” unless Tehran reaches a deal.

A White House official said Iran was desperate for a deal. But the official said Trump had no need to negotiate and would make whatever decision was best for the United States.

The official said Trump remained “open to talking with Iran under the right circumstances”.

Iran may put transit fee demand aside

Iran’s demand for transit fees for ships using Hormuz is also part of the talks.

Regional sources said Tehran was ready to remove the demand from the main agreement and put it in a separate attachment.

Ending the US blockade had become more important for Iran, the sources said.

Gulf states have rejected the proposal for transit fees.

The regional sources said putting the issue aside would only be temporary and would not mean Iran had given up its position.

The senior Iranian official said Iran was mainly concerned with keeping its administrative control over the waterway.

Gulf states have rejected Iranian control of Hormuz. They have called for freedom of navigation to be restored.

Midterm elections

Trump has said the US and Iran could reach a deal after the November 3 congressional midterm elections.

Former US negotiator Dennis Ross said he saw only a 30% chance of a deal being reached before the vote.

But Ross said both sides could have stronger reasons to reach an agreement before the elections rather than afterwards.

A deal before the midterms could reduce tensions in the Gulf, contain oil prices and help lower US gasoline prices, which are politically sensitive.

Iran could also have a better chance of getting economic relief while Trump has a stronger political reason to reach a deal.

Ross said Trump could face fewer limits after the elections and could be more willing to increase pressure on Iran or consider military options.

References: Reuters, ndtvprofit