Iran, US Stand Firm in Peace Talks as Oil Prices React to Strait of Hormuz Dispute
Ongoing Diplomatic Tensions and Economic Impact
By Parisa Hafezi, Humeyra Pamuk and Jana Choukeir
Diplomatic Stalemate at the United Nations
UNITED NATIONS/DUBAI, Sept 23 (Reuters) - Iran and the United States remain far apart on how to end their war but diplomacy must continue, a senior Iranian official told Reuters on Wednesday, after Iran's president told the UN General Assembly that Tehran would never surrender to US pressure.
Iranian President Masoud Pezeshkian, in his speech in New York, condemned what he called "signs of a bullying mentality" from US President Donald Trump, who had used the same forum on Tuesday to threaten to "annihilate" Iran.
The duelling speeches at the annual UN gathering bookended the first shuttle talks between the US and Iran for months, though they appeared to have yielded no concessions in the public stance of either side towards ending the war.
Peace Proposals and the Strait of Hormuz
The senior Iranian official, speaking on condition of anonymity, said Tehran was reviewing Washington's response to its peace proposals, which prioritise lifting a US naval blockade on Iranian ports and reopening the Strait of Hormuz.
"There are still many differences between the Iranian and US positions, but diplomacy is continuing," the official said.
US Response and Military Options
US Secretary of State Marco Rubio told reporters on Wednesday that a deal with Iran would involve hard work over a period of time, adding that Trump also had military options.
The US has also said it will impose so-called secondary sanctions against any country that allows Iranian flights after Wednesday. Mohsen Rezaei, secretary of Iran's Supreme National Security Council, told state TV Iran would ensure neighbouring countries' airports could not function if they stop Iranian flights.
Iran’s Stance at the UN General Assembly
President Pezeshkian’s Address
IRAN 'WILL NOT BOW TO PRESSURE', PRESIDENT SAYS
In his address to the 193-member General Assembly, Pezeshkian homed in on the US blockade of Iranian ports and on the Strait of Hormuz, conduit for a fifth of global oil and liquefied natural gas shipments before the war.
"It cannot be the case that everyone benefits from the Strait of Hormuz while we are denied access to shipping through this waterway. The permanent deployment of hostile fleets and the expansion of the war will not lead to peace," he said.
"The Iranian people will not bow to pressure," he added.
Control Over the Strait and International Shipping
Iran wants to exert control over the strait and collect fees from ships that use it. Washington rejects this and says the strait must remain fully open to international shipping.
Oil Market Reactions
Oil prices were up almost 2% on Wednesday in choppy trade as traders weighed the comments of Pezeshkian and Trump.
Nuclear Tensions and Indirect Talks
Trump on Tuesday argued that he had prevented Tehran from obtaining a nuclear weapon and could "annihilate the Islamic Republic" if no deal is reached to end the conflict.
Pezeshkian on Wednesday reiterated Iran's line that it is not seeking nuclear weapons.
Iranian and US officials held their first known indirect talks on Tuesday since a ceasefire collapsed in July, with Iran's Foreign Minister Abbas Araqchi and US envoys Steve Witkoff and Jared Kushner communicating through mediators.
Iranian Foreign Ministry spokesperson Esmail Baghaei said Tehran had conveyed conditions during a two-hour exchange of messages with Washington via a Qatari mediator. These included an end to the war on all fronts, a halt to US "acts of aggression" and the release of frozen Iranian assets.
Internal Iranian Reactions and Regional Impact
Hardliner Resistance to Diplomacy
IRAN HARDLINERS RESIST DIPLOMATIC MOVES
The diplomatic contact in New York caused a backlash in Iranian media associated with hardliners.
An opinion piece run by the semi-official Tasnim news agency, associated with the Revolutionary Guards, said Araqchi was wrong to have contacts with Witkoff and Kushner, "a major gift to Trump", as Iran had already conveyed its terms.
Supreme National Security Council’s Role
Iranian sources told Reuters the delegation had been ordered not to meet the Americans face-to-face by the Supreme National Security Council, a body that includes figures selected by Ayatollah Mojtaba Khamenei, the supreme leader. Khamenei has yet to appear in public since replacing his father, who was killed on the war's first day.
One Iranian journalist covering the visit told Reuters that some hardliners viewed the trip to New York itself as an insult to the memory of the slain leader, Ali Khamenei.
Wider Regional Conflict and Oil Supply Disruptions
The war, launched by Trump in February alongside Israel as "Operation Epic Fury", has lasted nearly seven months, killing thousands of people, disrupting global energy supplies and spreading to other countries in the region — particularly to Lebanon and more recently to Yemen.
Strait of Hormuz Security Incidents
In the latest reported attack in the Strait of Hormuz, Britain's UKMTO maritime security agency said a cargo ship had been hit by projectiles, causing two casualties among the crew. The crew was evacuated and the ship was on fire and adrift.
Oil Exports and Economic Consequences
Despite near-daily attacks, traffic through the strait has picked up in recent weeks. Oil producers pay shipping companies fees of as much as a quarter of a cargo's value to take the wartime risk of sailing through the strait with transponders switched off, before transferring crude to other vessels on the far side.
Exports from the United Arab Emirates have already recovered to pre-war levels, and Saudi Arabia has sold 60 million barrels of Gulf oil for both this month and next, to be delivered beyond the strait off the coast of Oman.
Nevertheless, a third of Gulf oil is estimated to be missing from global supplies. Shortages have particularly hit refined products such as diesel, causing inflation, pushing up interest rates and hurting Trump's Republicans.
(Reporting by Reuters bureauxWriting by Peter Graff and Gareth JonesEditing by Ros Russell and Philippa Fletcher)