LONDON (Realist English). On September 25, oil prices declined slightly as traders digested the latest diplomatic developments around the Strait of Hormuz and persistent supply risks. Brent crude futures on the London ICE exchange fell by $1.17 to $105.4 per barrel. The previous day, Brent rose 3.4%, reaching a one-week high.
Iran’s “Seven-Day Plan”
Iranian Foreign Minister Abbas Araghchi, on the sidelines of the UN General Assembly, told journalists that Tehran had conveyed a proposal to the US through mediators: if the American side fulfills certain conditions, the Strait of Hormuz will reopen by the end of the seventh day, and talks will begin simultaneously.
According to the contents disclosed by Araghchi in interviews with The New York Times and other publications, the plan requires the US to cease all hostile actions across the Middle East (including Lebanon) for seven days, unfreeze at least $12 billion in Iranian assets, lift sanctions on Iranian oil, and end the naval blockade of Iran.
On the seventh day of the ceasefire, Iran will reopen the Strait of Hormuz. Araghchi stated that he is awaiting the American side’s response and noted that China supports this plan.
A White House representative told CNN that the US is engaged in “active and constructive discussions” with Iran through mediators. One American official stated: “The US is in a very strong position, controlling the Strait of Hormuz, so we are not in a hurry. Nearly 22 million barrels of oil passed through the strait overnight.”
However, the Iranian side simultaneously refuted claims of “abandoning preconditions.” Iranian Foreign Ministry spokesperson Baghaei confirmed the talks took place but emphasized that Tehran’s position has not changed, and the conditions were conveyed to the American side through Qatar.
The Reality of Supply Risks
Diplomatic progress has not eliminated fundamental market concerns. The volume of traffic through the Strait of Hormuz remains significantly below normal levels.
Data shows that currently fewer than 5 tankers pass through the strait daily, while the American side claims significantly higher volumes. Since September 2, not a single very large crude carrier has exited the Strait of Hormuz.
Alternative routes are also under pressure. Saudi Arabia’s East-West pipeline delivers crude oil to the Yanbu port on the Red Sea coast, from where it travels through the Bab-el-Mandeb Strait to international markets.
However, the Houthis captured Perim Island in the Bab-el-Mandeb Strait on September 11, putting this alternative route under security threat as well. Saudi Arabia’s oil production in August fell to approximately 6 million barrels per day — the lowest level in more than 30 years.
According to the International Energy Agency (IEA), as of July 2026, about 8.3 million barrels per day of oil production capacity in the Middle East has still not been restored.
OPEC+’s Passive Position
Seven major oil-producing countries of “OPEC+” (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman) decided at their September 6 meeting to keep October production unchanged, pausing the increase cycle since April.
Analysts consider this decision rather forced. Dong Kangyin, Director of the Department of Energy and Low-Carbon Economics at the University of International Business and Economics, noted that the main factor determining oil prices now is not traditional supply and demand, but the transportation problem. “The shipping blockade in the Strait of Hormuz has a huge impact on the global oil market. Announcing production increases or cuts has little practical significance — the OPEC+ decision is essentially rather passive.”
Price Forecast
Chief Investment Officer of Karobaar Capital Haris Khurshid told Bloomberg: “As long as the situation does not change fundamentally, Brent will likely remain in the $100–110 range.”
He added that a credible agreement could quickly push the price below $100, while further export or logistics problems could bring the $120 price back onto the agenda.
Meanwhile, the diplomatic window remains open. Araghchi stated that Tehran is not in a hurry but believes it would be better if the US agreed to resume talks before the midterm elections in early November. Whether mediators in New York can achieve substantive contact will determine whether the decline in oil prices continues or they begin to rise again.
