Iran says it has received a response from the United States to its latest proposal aimed at reviving a collapsed ceasefire, adding a fresh development to negotiations that could determine the future of crude and refined-product flows through the Strait of Hormuz. The development comes as the conflict enters its eighth month and shipping through the strategic waterway remains significantly disrupted.
The proposal, presented by Tehran last week, calls for the United States to lift its blockade of Iranian ports while Iran would reopen the Strait of Hormuz within seven days. President Donald Trump had earlier said he rejected the proposal, although Iranian officials maintained that Tehran had not received a formal rejection at the time. Iran now says its foreign minister, Abbas Araqchi, has conveyed the US response to the Iranian government.
The latest communication followed indirect discussions facilitated by Qatar, with US and Iranian representatives holding separate talks on the sidelines of the United Nations General Assembly in New York. A source briefed on the discussions told Reuters that the two sides largely agree on the steps required but remain divided over the order in which those steps should be implemented.
For the oil market, the Strait of Hormuz remains the critical variable. Shipping through the waterway has increased in recent weeks, but Reuters reports that crude oil, refined-product and natural-gas flows remain substantially below normal levels. Shipping companies are also charging higher fees to undertake voyages through the area because of the security risks.
The market is nevertheless seeing some recovery in Middle East oil exports. Reuters reported that crude exports from key Middle Eastern producers reached about 12.8 million barrels per day in September, their highest level since the conflict began, while flows through Hormuz were estimated at around 7.4 million barrels per day. The recovery has helped ease some immediate supply pressure, but flows remain below pre-conflict levels.
That partial recovery explains why the market remains highly sensitive to developments around the Strait. A sustained reopening and normalisation of tanker movements could improve crude availability and reduce some of the supply premium built into prices. Conversely, further attacks or restrictions on shipping could tighten the market again.
The US withdrawal of its remaining forces from Iraq on Wednesday is another major regional development reported by Reuters. The withdrawal fulfils a plan agreed in 2024, while Iran and allied armed groups have portrayed the departure as a setback for Washington's regional presence. Reuters also reported concerns from an Iraqi analyst that Iran-backed groups could become more influential following the withdrawal.
For Nigeria's downstream market, the immediate significance is the potential impact of prolonged Gulf shipping disruption on international crude and refined-product benchmarks. Higher crude prices, longer shipping routes, elevated insurance and freight costs can feed into import-parity calculations, while a sustained improvement in Hormuz traffic could gradually ease some of those pressures.
The latest US response therefore leaves the oil market watching two closely connected developments: whether Washington and Tehran can agree on the sequencing of a possible ceasefire arrangement, and whether that agreement can translate into a reliable reopening of the Strait of Hormuz. Until there is clearer evidence of normalised flows, the disruption risk remains an important factor in crude pricing.