Oil Prices Slide as Iran Revives Failed June Peace Memorandum

Crude oil prices fell Friday after Iran asked the United States to return to an interim peace agreement that failed to end the war during the summer. The proposal again links diplomatic talks to reopening the Strait of Hormuz.

Brent crude futures, the international oil benchmark, declined 1.1% to $105.43 a barrel. U.S. West Texas Intermediate crude dropped 1.3% to $93.40 per barrel.

The declines followed comments from Iranian Foreign Minister Abbas Araghchi at the United Nations General Assembly in New York. Speaking to reporters Thursday, Araghchi said Iran had sent a plan to the United States through intermediators.

“We have introduced a plan to the United States through the intermediators, that if certain conditions are met, the Strait of Hormuz will be open at the end of seven days and talks will be restored,” Araghchi told reporters.

Under the proposal described by Araghchi, reopening the strait would occur after seven days if the specified conditions were satisfied. Talks between Iran and the United States would then resume.

Iran has asked the United States to meet the same conditions included in the June 17 memorandum of understanding, according to Araghchi. The memorandum previously provided the basis for an interim peace arrangement.

That earlier agreement did not produce a lasting end to the war. The memorandum quickly collapsed amid renewed fighting during the summer, leaving uncertainty about how the latest proposal would stop hostilities from breaking out again.

Araghchi tied implementation of Iran’s latest offer directly to whether commitments contained in the memorandum are carried out. He also said the conditions established by Iran must be met before the strait is reopened and talks restart.

“If anything they committed themselves in the MOU is in fact implemented in practice and the conditions that we have set are met, then the strait will be open and talks should be restarted to get to the final deal on the subjects of mutual agreement,” Araghchi said.

His remarks placed the failed June 17 memorandum back at the center of the latest diplomatic proposal. They also presented the reopening of the Strait of Hormuz as a conditional step rather than an immediate move.

Iran is now waiting for a response from the United States, Araghchi said. He did not describe a new framework beyond returning to the conditions set out in the previous memorandum.

The foreign minister indicated that Iran would prefer action before the U.S. midterm election. At the same time, he said the timing would depend on a decision by the U.S. administration.

“I think it would be much better if it is done before the midterm election, but it depends on the U.S. administration to decide,” the foreign minister said. “We are not in a hurry.”

The proposal therefore returns attention to an arrangement that already broke down during the summer. The source did not identify any changes designed to prevent another round of hostilities if the parties restore talks under the same conditions.

Friday’s market figures showed both major crude benchmarks moving lower. Brent remained above $105 a barrel after its 1.1% decline, while West Texas Intermediate stood at $93.40 following its 1.3% drop.

Araghchi’s offer combines a seven day timeline for reopening the Strait of Hormuz with the restoration of talks. For now, Iran’s next step depends on the U.S. response to conditions drawn from the failed June memorandum.