US and Iran hold talks in New York on phased deal to end shipping ban, economic sanctions

US and Iranian negotiators are holding talks in New York to discuss a multi-stage, gradual approach aimed at resolving the current crisis and the ongoing conflict of nearly seven months. The discussions focus on reopening the Strait of Hormuz by Tehran in exchange for Washington lifting the economic sanctions imposed on Iran.

Reuters cited two informed sources saying the Strait of Hormuz has become the central bargaining chip in diplomatic efforts. Tehran is seeking relief from sanctions that are crippling its economy and halting its oil exports, while Washington aims to secure freedom of navigation in this vital global energy corridor.

The talks face a major obstacle due to mutual distrust, with both sides refusing to give up their leverage first, according to two Iranian sources, two regional officials, and two Western diplomatic sources. However, a senior Iranian official explained on the sidelines of the UN General Assembly that "one way forward is to resolve the crisis in stages, starting with ending the sanctions and reopening the Strait of Hormuz." He added that the most likely scenario involves a gradual agreement ensuring sanctions relief and access to Iran's frozen assets.

For this approach to succeed, US President Donald Trump would need to accept a temporary solution following the collapse of a previous understanding in July. There is hope for a deal before the US midterm elections on November 3, a period that could offer Trump political gains by lowering oil and gasoline prices.

As part of efforts to end the sanctions as a pressing priority, regional sources revealed that Tehran is prepared to move its demand for transit fees on the Strait of Hormuz from the main agreement to a side annex, after Gulf states rejected the proposal and insisted any deal would be temporary in nature.

Despite these negotiations, former US negotiator Dennis Ross said the chances of reaching an agreement before the elections are no more than 30 percent, while a senior European official noted that Tehran has "a very long list of demands."

Meanwhile, Washington tightened its economic grip with new sanctions this month targeting commercial airlines and support networks. Trump warned of the "collapse" of Iran's economy if no deal is reached, while a senior Iranian official indicated slim prospects for a diplomatic solution due to "excessive demands," stressing Iran's readiness for renewed conflict by saying: "Our fingers are on the trigger."