People familiar with the matter said that negotiators from the United States and Iran are exploring a phased agreement that would include Iran reopening the Strait of Hormuz and the United States lifting its blockade of Iranian ports.

As of the time of writing, WTI crude oil futures were down 0.87% at $93.79 per barrel, while London Brent crude oil futures were down 0.92% at $106.05 per barrel.

The people said both countries had refused to reach such an agreement in recent months, but were pushing for a breakthrough on Thursday during the United Nations General Assembly. Qatari officials are mediating the talks.

The phased agreement would be similar to the memorandum of understanding reached by the United States and Iran in mid-June. That memorandum led to a fragile ceasefire, but it collapsed just weeks later.

A White House official said US President Donald Trump remains willing to talk with Iran, but stressed that the United States is in a position of strength because escalating sanctions and a continuing maritime blockade are pressuring Iran's economy, so there is no need to negotiate.

Since the war broke out, on-and-off negotiations between Washington and Tehran have repeatedly broken down, with the main disagreements centering on the Strait of Hormuz and when Iran can gain access to billions of dollars in funds frozen by the United States.

Iranian President Masoud Pezeshkian, who is in New York for the UN summit, said in a speech that as long as sanctions and the US naval blockade remain, Iran will not allow free navigation through the Strait of Hormuz.

According to reports, Iranian Foreign Minister Abbas Araghchi is representing Tehran in the negotiations and has laid out Iran's "firm position" on reopening the Strait of Hormuz. The conditions include the immediate lifting of the US naval blockade, the unfreezing of Iranian assets and an end to the war on "all fronts."

Trump told reporters on Tuesday that US and Iranian officials had spoken during the busy UN meetings in New York. His remarks boosted stocks and pushed oil prices lower.

Trump has repeatedly said the United States and Iran are close to a deal, but none has materialized. He has also repeatedly threatened military escalation against Iran, including threatening earlier this week to "wipe out" Iran, but has not acted on it.

White House envoy Steve Witkoff said earlier this week on social media that the two sides had held "long talks" through mediators, who shuttled between the two sides that day. He wrote on X: "They successfully completed a round of discussions, and we hope this round was constructive and promising. The mediators will continue their work."