US and Iran discuss phased plan to reopen Strait of Hormuz
Washington and Tehran are discussing a phased deal to lift the US blockade and reopen the strait, according to people familiar with the talks.
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Map: The Gulf and Hormuz, marking Strait of Hormuz
The talks come after weeks of tension over the strait, a key route for global oil shipments. Earlier this week, Brent crude climbed to $105.38 a barrel after Iranian airlines cancelled all flights to the UAE and talks over the strait showed no sign of progress. The UAE's Civil Aviation Authority suspended flights by Iranian carriers to and from the country, and the US Treasury has said 80% to 90% of Iranian external flights are already grounded.
Military risk has not gone away. An Israeli source has said Israel will strike Iranian nuclear sites again if Tehran crosses red lines, a warning that stands alongside the new diplomatic push.
A phased deal that reopens the strait and lifts the blockade would ease the tension that has kept oil elevated and shipping constrained. That would be bullish for riskier assets and bearish for energy, reversing the dynamic of the past weeks, in which fears of a wider conflict kept crude high and markets cautious.