Trump’s Rejection of Iran’s Proposal to Reopen the Strait of Hormuz: Renewed Negotiation Deadlock and Corporate Risk Management Strategies
Executive Summary
On September 26, President Trump rejected Iran’s proposal, delivered through a Qatari channel, to reopen the Strait of Hormuz within seven days. Using transit rights in the strait as leverage, Iran demanded the lifting of the maritime blockade, crude oil sanctions waivers, and a ceasefire that includes Lebanon. However, the United States reaffirmed its position that it will not accept these terms unless the dismantling of Iran’s nuclear program is prioritized. This rejection is assessed to stem from domestic political calculations aimed at keeping the option of resuming bombings open after the US midterm elections in November, though negotiation channels themselves remain active through Oman and Qatar. Nonetheless, as the competition over preconditions regarding transit rights remains unresolved, negotiations are tilting back toward a deadlock. Rather than betting on a specific scenario, South Korean companies need to establish a multi-path response system, such as increasing the proportion of spot contracts, diversifying regional hubs in the Gulf, and reducing reliance on transit through Iranian waters.
I. Current Situation and Analysis
Trump Rejects Iran’s Proposal to Reopen the Strait of Hormuz
1. Background and Progress
At the UN General Assembly on September 22–23, the leaders of the United States and Iran delivered contrasting speeches just a day apart. In his speech on September 22, President Trump threatened that the United States could "annihilate" Iran if a deal is not reached quickly [4]. President Pezeshkian responded in his speech on September 23, stating, "The more we face US pressure and bullying, the greater the resistance of the Iranian people will grow" [4]. He added, "Threats will only unite our people and make us stronger," and "We will either build security together or endure instability together" [4].
2. Current Situation
On September 22, a senior Iranian official visiting New York for the UN General Assembly stated that Iran would reopen the Strait of Hormuz within seven days if the United States took initial steps to ease military pressure [2]. This proposal had already been delivered to the US side through Qatar [1][2]. On the same day, following a meeting with the British Prime Minister, President Trump also noted that "they want to talk to us," suggesting that both sides were close to a deal. This comment stood in stark contrast to the "annihilate" threat he had made on the UN stage just hours earlier [2].
On September 24, Iranian Foreign Minister Araghchi held a private meeting in New York and outlined specific conditions to media outlets including the New York Times and The Guardian [14]. The three conditions presented by Iran were the lifting of the US maritime blockade on Iran, crude oil sanctions waivers, and a ceasefire that extends to Lebanon [7][12][14]. These conditions are understood to mirror the structure and content of the Islamabad Memorandum signed last June [2].
On September 26 (local time), President Trump told reporters outside the White House, "I reject their proposal" [3][5][9][13]. He remarked that Iran wants a deal to immediately reopen the strait because "they are losing" [15][17]. The Wall Street Journal, citing a White House official, reported that President Trump was privately skeptical about the feasibility of Iran implementing demands to dismantle its nuclear program [7][18]. Citing this report, the Hankyoreh reported that President Trump is keeping open the option of resuming bombings against Iran after the US midterm elections in November [1].
3. Positions of Key Actors
The Iranian Government: Foreign Minister Araghchi stated, "Iran has delivered a concrete seven-day plan to the United States through Qatar" [1]. Iran presented a multi-purpose negotiating card aimed at simultaneously securing economic benefits—namely, the lifting of the maritime blockade and crude oil sanctions waivers—and protecting its regional proxies through a ceasefire in Lebanon [7][12][14]. The BBC reported that Minister Araghchi mentioned an agreement is possible "if the necessary conditions are met," explaining that those conditions are contained in the memorandum of understanding (MOU) signed between the two countries in June [17]. This suggests that Iran is demanding the implementation of the existing agreement rather than proposing new conditions.
The Trump Administration: President Trump immediately and publicly rejected Iran’s proposal [3][5][9][13]. The justification for the rejection was his assessment of the situation—that Iran is "losing" and thus rushing to reopen the strait [15]. Underlying this is a fundamental distrust regarding the feasibility of Iran dismantling its nuclear program [7][18]. According to the Hankyoreh report, the US side is not ruling out the possibility of reactivating military options after the midterm elections [1].
The Pezeshkian Administration (Iranian Presidency): President Pezeshkian made it clear in his UN speech that Iran would not yield to pressure [4]. This is interpreted not as a contradiction of Foreign Minister Araghchi’s negotiation proposal, but as a dual-track strategy that combines hardline public rhetoric with behind-the-scenes negotiations.
Gulf States: Bahrain and the UAE show differences in their approach toward Iran. While Bahrain aligns with the US blockade policy, the UAE maintains pragmatic channels with Tehran [6]. Qatar played the role of mediator in these negotiations, conveying Iran’s messages to the US side [3][5][13].
Israel (The Netanyahu Government): Although not a direct party to the negotiations, whether Israel continues its airstrikes in Lebanon serves as a key variable in Iran’s conditions [2]. Prime Minister Netanyahu’s Lebanon policy remains a variable beyond US control, which is pointed out as a potential factor that could hinder implementation even if an agreement is reached between the US and Iran [2].
4. Key Issues
First, both sides have designated the issue of transit rights in the Strait of Hormuz as a precondition rather than a secondary agenda item of a ceasefire agreement [4]. Iran seeks to use the reopening of transit rights as leverage to secure the lifting of the blockade and sanctions waivers, while the United States remains skeptical of resuming transit without the dismantling of Iran’s nuclear program. This structural confrontation increases the likelihood that negotiations will stall again, even if the Omani mediation channel remains active [4].
Second, the condition of a ceasefire in Lebanon is a variable outside US control. Because it depends on Prime Minister Netanyahu’s independent military decisions, implementation cannot be guaranteed solely through a bilateral US-Iran agreement [2].
Third, there is a recurring negotiation pattern observed since the Islamabad Memorandum. The current seven-day plan is structurally similar in form and conditions to the June memorandum [2]. The pattern of hardline rhetoric and signals of an imminent deal appearing on the same day is also repeating, making it premature to conclude that this rejection represents a complete termination of negotiations [2].
Fourth, negotiations are linked to the US political calendar. With the possibility of the United States reactivating military options against Iran being raised around the November midterm elections [1], the timing and conditions for resuming negotiations are likely to be influenced by the US domestic political schedule.
II. In-Depth Analysis
Trump Rejects Iran’s Proposal to Reopen the Strait of Hormuz
1. Root Cause Analysis
The superficial issue in this breakdown of negotiations is transit rights in the Strait of Hormuz. However, the fundamental cause lies in the fact that seven months after the outbreak of hostilities, the United States has failed to achieve its initial military objectives [6]. Early in the conflict, President Trump predicted that the war would end in "four to five weeks" [6]. He subsequently repeated claims of "two weeks, or at most a few days more" [6]. All of these predictions proved incorrect [6]. Neither of the two primary goals—regime change and the dismantling of nuclear facilities—has been realized [6].
The timing of Iran’s return to the negotiating table must also be understood in this context. Seizing the opportunity of the UN General Assembly, Iran proposed a deadline to reopen the strait within seven days [1][2]. Rather than an admission of military inferiority, this can be viewed as a preemptive move driven by the assessment that its negotiating leverage would diminish as US pressure drags on. This dynamic is revealed in the remarks made by President Trump himself when rejecting the proposal. He claimed that Iran wants a deal to immediately reopen the strait because "they are losing" [15][17]. This represents a US framing that seeks to define Iran’s proposal not as a sign of recovering negotiating power, but as a desperate attempt to surrender.
At the same time, skepticism existed within the United States regarding whether the demand for the dismantling of Iran’s nuclear program could actually be enforced. The Wall Street Journal, citing a White House official, reported that President Trump was privately skeptical on this point [1]. This suggests that the rejection was not merely a negotiating tactic, but was likely based on a structural assessment that the core condition demanded by the United States is fundamentally unacceptable to the Iranian regime.
2. Structural Context
Security Structure: Competition over Preconditions Regarding Transit Rights
The issue of transit rights in the Strait of Hormuz has become established for both sides as a precondition rather than a secondary agenda item of ceasefire negotiations [4]. In this structure, neither side is willing to yield on transit rights first without receiving other concessions from the opponent. Iran seeks to use the strait as a weapon to secure the lifting of the US maritime blockade and crude oil sanctions waivers [7][12][14]. Conversely, the United States is using the continuation of the blockade as leverage to pressure Iran into dismantling its nuclear program. Although Oman maintains a mediation channel, negotiations are bound to repeatedly stall unless this structural conflict over preconditions is resolved [4].
Political Structure: The US Midterm Election Schedule
President Trump’s negotiating posture is influenced by the domestic political calendar of the US midterm elections in November. According to the Wall Street Journal report, while President Trump is skeptical of Iran’s ceasefire proposal, he is also keeping open the possibility of resuming bombings against Iran after the midterm elections [1]. This demonstrates that the rejection is intertwined not only with pure military and diplomatic calculations, but also with domestic political considerations aimed at preserving hardline response options post-election. From the Trump administration’s perspective, resetting the negotiation landscape after the elections may be a more advantageous card than rushing into a settlement beforehand.
Regional Structure: Policy Rifts Among Gulf States
Rifts in policies toward Iran persist among Gulf states. While Bahrain distances itself from Iran, the UAE exhibits a dual-track approach by continuing pragmatic contacts with Tehran [6]. This division acts as a constraint on US efforts to build a unified regional blockade against Iran. At the same time, from Iran’s perspective, it leaves open the possibility of utilizing individual channels with certain Gulf states as a bypass route for negotiations.
Economic Structure: Conflict Between the Blockade and Transit Fee Revenues
President Trump pointed to the fact that Iran "makes money from it" as the reason why it is rushing to reopen the strait [8]. This reflects the perception that the strait serves a dual purpose for Iran, acting as both a means of military control and a source of economic revenue. As the maritime blockade drags on, Iran’s oil export routes become restricted, leaving control over transit as virtually the only physical leverage Iran can wield in negotiations. This asymmetric structure is the background that drove Iran to adopt a strategy of using transit rights as leverage to simultaneously secure the lifting of the blockade and sanctions waivers.
3. Historical Precedents and Comparative Case Analysis
In terms of form and conditions, the current seven-day plan shares a similar structure with the Islamabad Memorandum signed last June [2]. The Islamabad Memorandum also addressed the issue of transit through Hormuz, but after the memorandum expired, Iran reasserted its control over the strait by force [6]. Consequently, a paradoxical situation emerged where clashes actually intensified in September [6]. This demonstrates a pattern where one-off agreement documents fail to provide a fundamental solution to the transit rights issue, instead serving as triggers for the recurrence of armed conflict upon expiration.
The incident on September 22, where President Trump made an "annihilate" threat on the UN stage only to suggest that a deal was close after meeting with the British Prime Minister just hours later, is also an extension of this pattern [2][4]. The phenomenon of hardline rhetoric and conciliatory signals alternating on the same day from the same individual is not new to this round of negotiations. This repetitive structure has historically served as a factor making it difficult to predict an actual breakthrough based solely on the statements of one negotiating party.
4. Key Variables Shaping Future Developments
The first variable is whether the Omani mediation channel survives. With the transit rights issue entrenched as a precondition, whether the mediation channel remains active will dictate the timing of any future resumption of renegotiations [4].
The second variable is whether Prime Minister Netanyahu continues airstrikes in Lebanon. The conditions proposed by Iran include a ceasefire that extends to Lebanon [7][12][14]. This is a variable that goes beyond the scope of bilateral US-Iran negotiations; depending on Israel’s independent military actions, satisfying Iran’s conditions could become fundamentally impossible.
The third variable is the direction of US policy shifts after the midterm elections. As President Trump has kept open the possibility of resuming bombings post-election, whether the US stance toward Iran pivots back to a hardline approach after November could redefine the entire negotiation landscape [1].
The fourth variable is whether Gulf states unify their policies. As long as the dual-track approaches of Bahrain and the UAE persist, it will be difficult for the United States to establish a unified regional pressure front against Iran [6]. Whether this rift is mended will be a key factor determining the strength of US negotiating leverage.
III. Recommended Action Plan
Trump Rejects Iran’s Proposal to Reopen the Strait of Hormuz
Final Recommendations and Action Plan
1. Comprehensive Assessment and Recommended Action Plan
President Trump’s rejection does not signify a complete termination of negotiations. He merely stated that he "rejects" Iran’s proposal, without closing the channel itself [3][5][13]. The Omani mediation channel remains active [4]. The communication route through Qatar also remains open [1][2]. However, the structural conditions of the negotiations are assessed to have deteriorated. Iran seeks to use transit rights in the strait as leverage to secure the lifting of the maritime blockade and crude oil sanctions waivers [7][12][14]. The United States intends to use this as a tool to pressure Iran into dismantling its nuclear program. Unless this competition over preconditions is resolved, negotiations are highly likely to stall again [4].
President Trump’s remarks are influenced by the domestic political calendar of the November midterm elections. According to the Wall Street Journal report, while he is skeptical of Iran’s ceasefire proposal, he is also keeping open the possibility of resuming bombings after the elections [1]. This suggests that the current rejection may not be a final decision, but rather a stalling tactic aimed at freezing the negotiation landscape before the elections. A previous EAI analysis assessed that "the probability of optimistic implementation is 20%, while partial implementation and renewed deadlock is the most probable scenario at 50%" [2]. With this rejection, this outlook is assessed to have tilted further toward a renewed deadlock.
The recommended course of action for South Korean companies is to avoid betting on any specific scenario. While they should not rush to return to normal shipping routes, they must also gradually reduce their reliance on the unilateral transit system that Iran is reasserting by force [4][6]. The priority should be to establish a structure capable of minimizing losses across all three potential paths: a negotiated settlement, a renewed deadlock, or a military re-escalation [2].
2. Short-, Medium-, and Long-Term Action Plans
Short-term (1–4 weeks)
The share of spot contracts for Iranian crude oil and related cargo should be increased. This is a measure to mitigate price and volume risks associated with long-term contracts [2]. Fluctuations in insurance premium rates and ocean freight rates for cargo transiting the Strait of Hormuz must be monitored on a weekly basis. The first point of observation is the extent to which the market reaction immediately following President Trump's rejection rolls back expectations of sanctions relief [3][5][13].
Medium-term (1–3 months)
The results of the US midterm elections in November and the post-election direction of the Trump administration's response toward Iran must be tracked [1]. The survival of the Omani mediation channel and the activation of an alternative channel through Qatar must be constantly monitored [1][2][4]. Differences in policies toward Iran among Gulf states also require separate management. While Bahrain distances itself from Iran, the UAE continues practical contact with Tehran, making it necessary to establish dual procurement and logistics hubs in the Gulf region by country [6].
Long-term (3 months or longer)
Efforts to diversify procurement sources must be pursued to fundamentally reduce dependence on Iran's transit regime [2][4]. A system to simultaneously monitor alternative logistics routes for both maritime and air transport must be established [4]. Until a determination can be made as to whether the core US demand of dismantling the nuclear program is a realistically achievable condition at the negotiating table, it is advisable not to assume that these negotiations can be concluded in the short term.
3. Monitoring Indicators and Trigger Points
First is whether the Omani and Qatari mediation channels remain active. If either channel is officially suspended, it should be viewed as a signal that the renewed deadlock will be prolonged [1][2][4].
Second is the shift in the tone of President Trump's remarks on Iran. There is a precedent where threats of "annihilation" and mentions of being "close to a deal" occurred on the same day [2][4]. Sudden shifts in rhetoric must be considered alongside the possibility that they are intended for domestic political consumption rather than reflecting actual progress in negotiations.
Third is whether the United States reactivates military options after the November midterm elections. As reported by the WSJ, whether the possibility of post-election airstrikes translates into actual action is a key turning point [1].
Fourth is whether Israel continues its airstrikes on Lebanon. Since the conditions proposed by Iran include a ceasefire that extends to Lebanon [7][12][14], any shift in the Netanyahu government's policy toward Lebanon will directly affect the prospects of reaching a negotiated settlement.
Fifth is Iran's management of the transit regime in the Strait of Hormuz. If the unilateral transit regime established by Iran through force since the outbreak of the war becomes entrenched as the standard shipping route, it carries the risk of being prolonged under an unstable legal status [4][6].
4. Summary and Conclusion
President Trump's rejection of the Iranian proposal is assessed not as the termination of negotiation channels, but as a shift toward a renewed deadlock [3][5][13]. The fundamental cause is the competition over preconditions regarding transit rights in the Strait of Hormuz, compounded by regional variables such as the US domestic political calendar of the November midterm elections and policy rifts among Gulf states [1][6]. Rather than betting on either a successful settlement or a breakdown of negotiations, South Korean companies should establish a structure to minimize losses across all three pathways by increasing the share of spot contracts and diversifying procurement sources [2].
References
[3] [Cyprus Mail] Trump rejects Iranian proposal to open Hormuz and end fighting
[5] [Channel News Asia] Trump rejects Iran's Hormuz proposal; Tehran calls for diplomacy
[7] [The Guardian] Trump rejects Iran’s seven-day peace deal to reopen strait of Hormuz
[9] [Geo News] Trump rejects Iranian proposal to open Hormuz and end fighting
[10] [The Hindu] Trump rejects Iran's Hormuz proposal; Tehran calls for diplomacy
[11] [Gulf News] Trump rejects Iran proposal for deal to reopen Hormuz
[13] [Al-Monitor] Trump rejects Iranian proposal to open Hormuz and end fighting
[14] [Daily Sabah] Iran offers Hormuz reopening, nuclear talks in conditional US deal
[15] [Le Monde] Trump rejects Iran's plan to reopen Strait of Hormuz
[16] [POLITICO] Trump rejects Iran’s latest Strait of Hormuz deal offer
[17] [BBC News] Trump rejects Iran deal to reopen Strait of Hormuz in seven days
[18] [Al-Monitor] Iran stands firm on Hormuz plan after US rejection
[19] [The Star (MY)] Trump says Iran deal nearing, Tehran offers Hormuz reopening
[20] [Al Jazeera] Trump rejects Iran’s seven-day roadmap to reopen Strait of Hormuz
[21] [Daily Sabah] Iran pitches new deal to reopen Strait of Hormuz as talks stall
[22] [Die Presse] Trump erteilt Waffenruhe mit dem Iran offenbar eine Absage
[23] [Daily Sabah] Iran awaits US response on plan to reopen Strait of Hormuz
[24] [Al Jazeera] Trump rejects Iranian offer to reopen Strait of Hormuz
[25] [DW (Deutsche Welle)] Trump rejects Iran proposal to reopen Strait of Hormuz
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.
This report is an in-depth analysis planned by an EAI researcher, grounded in sophisticated AI-assisted research, and finalized by the EAI researcher.
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