Oil falls as potential diplomatic solution to Iran conflict emerges

U.S. crude oil posted a sharp loss for the week as Tehran and Washington held discussions on the sidelines of the U.N. General Assembly in New York City.

West Texas Intermediate dropped 2.3% to close at $92.41 per barrel. Brent, the international benchmark, declined 2.1% to settle at $104.32. U.S. crude finished the week 7.9% lower while Brent was flat.

Tehran has offered to open the Strait of Hormuz in seven days if the U.S. meets the conditions in the interim peace deal reached in June, Iranian Foreign minister Abbas Araghchi told reporters Thursday at the U.N.

But the June memorandum of understanding quickly collapsed as fighting broke out over transit rights through Hormuz. It is unclear how Iran’s current proposal would prevent hostilities from erupting again.

Iran will restart talks to reach a final deal if the U.S. implements the MOU conditions, Araghchi said. Tehran is waiting for a response from the U.S., the foreign minister told reporters.

“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,” Araghchi told reporters. “We are not in a hurry.”