Trump unlikely to accept Iran’s latest proposal to end war, sources say

Tehran is said to have proposed a plan that would reopen the Strait of Hormuz while leaving questions about its nuclear program for later negotiations. Follow for live updates.

Tehran's proposal to end the war involves reopening the Strait of Hormuz, a vital shipping lane for international oil trade, while leaving questions about its nuclear program for later negotiations. Ali Vaez, Iran Project Director at the International Crisis Group think tank, says President Donald Trump is relying on the US blockade of Iran's ports to pressure Tehran. The blockade has resulted in a significant decline in Iran's oil exports, from 2.5 million barrels per day in April 2018 to around 200,000 barrels per day in June 2019. This decline has had a substantial impact on Iran's economy.

The conflict between the US and Iran has led to increased oil prices, which directly affect the price of gas. If the Strait of Hormuz were to reopen, oil prices could decrease, leading to lower gas prices for consumers. According to the US Energy Information Administration, a $1 decrease in the price of crude oil can result in a 2.5-cent decrease in the price of gasoline. This could lead to significant savings for drivers.

The current conflict between the US and Iran is part of a larger historical context of tensions between the two countries. The US withdrawal from the Joint Comprehensive Plan of Action in May 2018, followed by the reimposition of sanctions, has led to a significant escalation of tensions. Insiders know that Iran's proposal is an attempt to ease the economic pressure on the country while maintaining its nuclear program. The International Crisis Group has warned that the conflict could lead to a wider regional war.

The US is expected to respond to Iran's proposal by the end of the month. A key decision to watch for is the upcoming meeting of the Organization of the Petroleum Exporting Countries, where member states will discuss production levels and their impact on global oil prices. Interestingly, some analysts believe that a decrease in oil prices could actually harm the US economy, as it would reduce the revenue of US oil producers, highlighting the complex and often counterintuitive nature of global oil markets.