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Iran says it receives US response to latest proposal as Washington pulls out of Iraq - Finance news and analysis from Global Banking & Finance Review
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Iran says it receives US response to latest proposal as Washington pulls out of Iraq

Published by Global Banking & Finance Review

Posted on September 30, 2026

5 min read

· Last updated: September 30, 2026

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Iran Gets US Proposal Response Amid Washington's Withdrawal from Iraq

US-Iran Tensions and Regional Impact

By Ahmed Rasheed, Jana Choukeir and Andrew Mills

Iran Receives US Response to Ceasefire Proposal

BAGHDAD/DUBAI, Sept 30 (Reuters) - Iran said on Wednesday it had received a US response to its latest proposal to resurrect the collapsed ceasefire in the Gulf, days after President Donald Trump said he had rejected it.

Celebrations in Tehran and the "Axis of Resistance"

Iran's allies were celebrating on Wednesday after Washington withdrew the last of its forces from neighbouring Iraq, where 4,500 US troops died in the biggest US war of the century. More than 200,000 Iraqi civilians were killed in chaos unleashed after US forces toppled dictator Saddam Hussein in 2003.

Tehran views the pullout as a victory for its "axis of resistance" of allied armed groups, and a step towards its aim of driving US forces out of the region.

Details of the Iranian Proposal

With the US-Israeli war against Iran now entering its eighth month, Iran put forward a proposal last week under which the United States would lift its blockade of Iranian ports and Iran would reopen the disrupted Strait of Hormuz within seven days.

Trump said on Sunday he had rejected the proposal, although Iran's Foreign Minister Abbas Araqchi said Tehran had not received a formal rejection. In a post on X on Wednesday, an Iranian government spokesperson said Araqchi had conveyed a US response to the Iranian government.

Iran says its plan aims to restore an interim agreement which collapsed weeks after it was signed by Trump and Iran's President Masoud Pezeshkian in June.

Qatari Mediation and Ongoing Talks

Last week, Qatari mediators shuttled between US and Iranian envoys in New York on the sidelines of a meeting of the United Nations, the first proximity talks between the warring sides since the ceasefire unravelled.

An official briefed on the talks, who is not Iranian and spoke to Reuters on condition of anonymity, said the Qataris had briefed Araqchi on the US response on Tuesday when Araqchi stopped off in Doha on his way home from New York. According to the official, the sides largely agree about the steps that are needed but still disagree about the order in which to take them.

Strategic Importance of the Strait of Hormuz

Iran wants an eventual deal to grant it control over the Strait of Hormuz, the world's most important oil shipping route, which runs past its coast.

Shipping through the strait has increased in recent weeks, with shippers charging high fees to brave the risk of attacks. But flows of crude oil, refined products and natural gas remain substantially disrupted. In the latest incidents, Britain's UKMTO maritime security body reported on Wednesday that two ships had been hit by projectiles the previous day.

US Withdrawal from Iraq: Regional and Domestic Reactions

US Withdrawal Seen in Iraq as Defeat for Washington

US WITHDRAWAL SEEN IN IRAQ AS DEFEAT FOR WASHINGTON

US and Iraqi officials announced the withdrawal of the last American troops from bases in Iraq on Wednesday, fulfilling a plan agreed in 2024 under President Joe Biden and carried out by the Trump administration while it wages war with Iran next door.

Reactions from Iran and Its Allies

The withdrawal was celebrated by Iran and its allies. It marked an "​historic victory for the Iraqi Islamic resistance groups and honorable Iraqis, and a crushing defeat for the American project," said Abu Mojtaba al-Yasiri, a commander in the Islamic Resistance in Iraq, an umbrella group of Iran-backed armed factions.

Iraq, which the United States invaded in 2003, has a Shi'ite majority like Iran, and Tehran has established broad political and military influence there.

Ongoing Proxy Conflict and Security Concerns

The country has frequently become a proxy battlefield between the United States and Iran. Of the 18 US service members listed as killed since Trump launched "Operation Epic Fury" in February, seven died in Iraq. Washington blames Iran-backed groups in Iraq for striking neighbouring countries, most recently knocking out a big Saudi oil pipeline three weeks ago.

The US withdrawal raises "the possibility that Iran's proxies will feel increasingly empowered in the absence of a Western military presence," said Baghdad-based political analyst Ahmed Younis. "These groups may attempt to expand their role in shaping state policies and consolidating their presence within ​key institutions."

Domestic Impact in the United States

At home in the United States, polls show the Iran war was unpopular from the outset. The disruption to global energy supplies and resulting surge in fuel prices have hurt Trump's Republicans, trying to hang on to both houses of Congress in legislative elections five weeks away.

Iran's Islamic Revolutionary Guard Corps urged Americans on Tuesday to vote out Trump's allies.

"Remove from power the evil, deceitful, and violent politicians who are responsible for America’s current state," they wrote in a 26-page letter to US voters. "Make sure your politicians understand that the world has changed." 

Ongoing Economic and Security Challenges

The war has intensified an economic crisis inside Iran, but Tehran has retained the ability to strike its neighbours and menace ships in the strait, where a fifth of global oil transited before the war. Trump says the war will be over soon and Iran will ultimately surrender.

"I don't know if they are going to give up yet but they'll give up," he told reporters on Tuesday. "They are doing very poorly."

(Reporting by Ahmed Rasheed and Muayad Hameed in Baghdad, Jana Choukeir in Dubai, Kanishka Singh in Washington, Menna AlaaElDin in Cairo, and Andrew Mills Writing by Peter GraffEditing by Philippa Fletcher)

Key Takeaways

  • Iran forwarded a seven‑day deal proposal to reopen the Strait of Hormuz via Qatari mediators; Trump publicly rejected it, though Iran says the response was conveyed through diplomatic channels (investing.com).
  • The U.S. completed its troop withdrawal from Iraq on September 30, marking the end of a decades‑long presence and hailed by Iran as a defeat for U.S. influence (apnews.com).
  • Shipping in the Strait of Hormuz remains disrupted amid attacks on vessels; Iran’s proposal and the troop withdrawal highlight shifting power dynamics in the region (internazionale.it).

References

Frequently Asked Questions

What is Iran's latest proposal to the US about?
Iran proposed that the US lift its blockade on Iranian ports in exchange for reopening the Strait of Hormuz, aiming to restore a collapsed ceasefire agreement.
How did Iran react to the US military withdrawal from Iraq?
Iran and its allies celebrated the US withdrawal, considering it a victory for their 'axis of resistance' and a strategic win in the region.
Why is the Strait of Hormuz significant in this context?
The Strait of Hormuz is the world's most important oil shipping route, and Iran's proposal includes seeking control over it, which would significantly impact global oil markets.
What is the impact of the US withdrawal on Iraq?
Analysts suggest that the US withdrawal could empower Iran-backed groups in Iraq, allowing them greater influence over state policies and key institutions.
What role did Qatari mediators play in the US-Iran talks?
Qatari mediators facilitated proximity talks between US and Iranian envoys, helping communicate responses between the two sides regarding the ceasefire proposal.

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