Brent crude fell 3% after Reuters reported that US and Iranian negotiators in New York were discussing reopening the Strait of Hormuz in exchange for Washington lifting its economic blockade, then rebounded after an Iranian state media journalist disputed the report. The S&P 500 turned positive on the initial news after falling as much as 0.5%.

Reuters cited Iranian, regional and Western diplomatic sources describing a possible agreement in stages, potentially giving Tehran access to some frozen assets. Mohammad Ghaderi, an Iranian state media journalist, called the report “false and its goal is to control the price of oil,” adding that “no negotiations are underway.” He said Washington must meet Iran’s conditions in a single step before the strait could reopen under Iranian control.

Sequencing remained the main obstacle in the discussions described by Reuters, with neither side willing to surrender its leverage first. Regional sources said Iran could defer its demand for Hormuz transit fees to a separate attachment rather than abandon it, while retaining its claim to administrative control over the waterway. Persian Gulf leaders opposed Iranian control and called for freedom of navigation. Negotiators were also seeking durable concessions after an earlier US-Iran understanding collapsed in July, Reuters reported.