US-Iran talks weigh sequenced Hormuz reopening as Iranian flights are scrapped

Another round of US-Iran Hormuz negotiations: US and Iranian negotiators in New York are exploring a phased agreement in which Tehran would reopen the strait and Washington would lift its naval blockade, with Qatar mediating. Brent slid toward USD 106/bbl on the reports. The sticking point is that neither side wants to give up its leverage first, and a similar sequenced understanding struck in June collapsed within weeks.

Tehran is willing to move its demand for transit fees into a side attachment, sources say, but not to give up control of the waterway. US President Donald Trump has floated an agreement after the 3 November midterms, while former US negotiator Dennis Ross puts the odds of one before the vote at 30%.

The negotiations come as travel routes across the region are being halted. Oman and Azerbaijan suspended all Iranian airline flights into their countries after US Treasury Secretary Scott Bessent announced that all Iranian airlines would be shut down worldwide starting Wednesday. Meanwhile, Iraq has banned Iranian flights to its capital Baghdad after Washington imposed sanctions on services provided to Iran’s aviation sector and Georgia has suspended flights to Tbilisi, the Financial Times reports. Mahan Air has also dropped its Istanbul, Ankara, and Muscat routes. The UAE also suspended all flights by Iranian airlines to and from the country until further notice, the General Civil Aviation Authority (GCAA) said in a statement carried by Wam.

For the UAE, flights were one of the last threads left with Iran after Abu Dhabi halted all trade, commercial exchange, and financial transactions with Tehran last month. The central bank tightened the financial side further on Wednesday, sanctioning Bank Melli’s UAE branches over money laundering and terror financing violations.