Oil Falls 6% as Iran Puts Forward Conditional Plan to Reopen Strait of Hormuz Within Two Days
Key Facts
Iranian President Masoud Pezeshkian said the Supreme Leader Ayatollah Mojtaba Khamenei had granted the government “certain authority” to hold peace talks, in remarks carried by Reuters on November 2. Pezeshkian added that Tehran would try to resolve the problem through dialogue, state media reported, without specifying the scope of the authority or details of the process. The remarks coincided with Iran’s announcement that it had a plan to reopen the Strait of Hormuz and resume nuclear talks with the United States within two days if Washington met its demands. Markets linked these developments to hopes of easing disruption to energy supplies from the Middle East, while oil prices fell sharply. The announcement of the authority does not, by itself, mean that a deal has been reached or that the United States has accepted the proposal.
According to the Associated Press, the Iranian plan includes reopening the strait and resuming nuclear talks if Washington meets Tehran’s demands, with the agency offering no details indicating U.S. acceptance of the terms. Iran said ships crossing the strait after it reopens would follow a route agreed by Iran and Oman and would move under Iranian supervision. This arrangement puts the management and terms of maritime traffic among the elements of the proposal, alongside reopening the waterway. The Strait of Hormuz is a direct focus of the talks, following an increase in reports of attacks on oil tankers passing through it. Tehran had included conditions in an earlier proposal, including lifting the U.S. blockade of Iranian ports, while its current demands also address oil sales and a ceasefire covering Lebanon.
Iranian officials said the United States must lift sanctions on Iranian oil sales and agree to a ceasefire covering Lebanon. The Associated Press said the earlier proposal included 7 conditions, including lifting the blockade of Iranian ports, while the version announced now focuses on opening the strait within two days under terms governing navigation. Iranian Foreign Ministry spokesman Esmail Baghaei said the plan remained a basis for negotiations with Washington through mediators, describing it as “once again showing Iran’s approach based on goodwill.” Baghaei did not indicate that Tehran had changed its demands, and the agency reported no sign that Washington had accepted the proposal. The plan therefore remained on the table for negotiations, with disagreements continuing over sanctions, the blockade, the ceasefire and terms for passage through the strait.
In energy markets, Brent crude futures fell 6.0% to $106.65 a barrel at 1357 GMT on November 2, according to Reuters. West Texas Intermediate fell 6.1% to $97.75 a barrel at the same time. Earlier, the contracts had touched lows of $105.86 for Brent and $97.12 for U.S. crude. Reuters attributed the decline to talks between Iranian and Qatari officials on ending the U.S.-Israeli war on Iran, and the hopes they raised of reducing supply disruptions in the Middle East. EL7’s daily closing data also showed Brent falling from $113.43 on October 30 to $108.71 on November 2.
The moves followed talks led by Qatari mediators. Reuters said Iranian negotiators held the third consecutive day of talks in Doha on November 1, aimed at reaching a deal to end the war. Qatari mediators began discussions with Iranian officials in Tehran on Friday, before the talks moved to Doha on Saturday, in coordination with regular communications with Washington. The Iranian delegation left Qatar on Sunday after a round of negotiations, according to a regional official briefed on the talks by the Associated Press. Iranian Foreign Minister Abbas Araqchi said discussions on the two-day proposal were continuing, but no final outcome had been reached. He added that Tehran was ready for “defense and diplomacy,” and said the talks were intended to continue consultations with Qatari mediators.
A regional official said a draft proposal had been circulated for feedback and a subsequent meeting was under consideration. Reuters also quoted an official familiar with the talks as saying a draft was being circulated, with a follow-up meeting possible. The sources gave no specific date for that meeting and no confirmation that the parties had agreed on a final version. On a parallel diplomatic track, China announced on November 2 that it planned to send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November. China’s Foreign Ministry spokeswoman said the envoy would focus on easing tensions and promoting regional stability. The next steps depend on the mediators’ deliberations and Washington’s response to Iran’s terms, while neither Tehran nor Washington has announced acceptance of a final agreement.