US and Iran Explore Phased Deal to Reopen Hormuz and Lift Blockade

US and Iranian negotiators in New York are exploring a phased path out of the war that would have Tehran reopen the Strait of Hormuz and Washington lift its economic blockade of Iran, Reuters reported, citing sources close to the talks. The strait has become the central bargaining chip in efforts to end the nearly seven-month conflict: Iran is seeking relief from a blockade that is choking its economy, while Washington wants free passage for ships on a route that carries a fifth of the world's oil. Reuters said the talks face a significant obstacle in that neither side wants to be first to give up its leverage, so no agreement is in place. For the oil market the direction is unambiguous: Hormuz reopening would remove the risk premium that has carried Brent above $100, which reaches FX through the Canadian dollar on crude and the euro on energy costs.