US, Iran trade mediated messages at UN, neither side budges

The first shuttle talks between the United States and Iran for months raised hopes on Wednesday that the adversaries could make progress towards ending the Middle East war, although neither side spelled out any change in its position.

Iranian Foreign Minister Abbas Araqchi and US envoys Steve Witkoff and Jared Kushner communicated through mediators on the sidelines of the UN General Assembly in New York, the first such contacts since an interim ceasefire agreement collapsed in July.

"Steve and Jared had a very productive meeting today with mediators of Iran," US President Donald Trump said. "I think there's a lot of momentum for them to make a deal. It's what we're hearing from everybody."

Earlier, Trump had told the UN General Assembly in a speech that he had to decide whether to make a deal with Iran or "annihilate" it. Iranian President Masoud Pezeshkian was due to address the gathering on Wednesday.

Iranian Foreign Ministry spokesperson Esmail Baghaei said Tehran had engaged with the United States through a Qatari mediator in New York and conveyed conditions, including an end to the war on all fronts and a halt to US "acts of aggression".

Some Iranian state media had earlier reported that Araqchi and Witkoff had met, but Iranian officials clarified to Reuters that it was not face-to-face. Araqchi met the prime minister of Qatar, Sheikh Mohammed bin Abdulrahman Al Thani, one of the main mediators at previous talks.

The contacts offered the first diplomatic opening in months after negotiations broke down in July and fighting resumed across the region. Since then, the two sides have repeatedly exchanged fire, although Trump has stopped short of a full-scale resumption of US strikes after military commanders warned munitions stocks were running low.

IRAN HARDLINERS RESIST DIPLOMATIC MOVES

The diplomatic contact in New York caused backlash in Iranian media associated with hardliners.

An opinion piece run by the semi-official Tasnim news agency, associated with the Revolutionary Guards, said Araqchi was wrong to have contacts with Witkoff and Kushner, "a major gift to Trump", as Iran had already conveyed its terms.

Iranian sources told Reuters the delegation had been ordered not to meet the Americans face-to-face by the Supreme National Security Council, a body that includes figures selected by Ayatollah Mojtaba Khamenei, the supreme leader, who has yet to appear in public since replacing his father killed on the war's first day.

One Iranian journalist covering the visit told Reuters that some hardliners viewed the trip to New York itself as an insult to the memory of the slain leader, Ali Khamenei.

OIL PRICES HOLD NEAR TWO-WEEK LOW

Still, the diplomatic opening helped keep oil prices near two-week lows. Brent crude hovered around $100 a barrel after surging earlier this month when Yemen's Iran-backed Houthis launched a major offensive, threatening traffic through the Red Sea, an alternative Saudi export route.

The war, launched by Trump in February alongside Israel as "Operation Epic Fury", has lasted nearly seven months, killing thousands of people, disrupting global energy supplies and spreading to other countries in the region — particularly to Lebanon and more recently to Yemen.

Trump repeated previous assertions that the war could end around the time of November's US midterm elections, though he has not explained why.

An interim agreement reached in June, signed by Trump and Pezeshkian, would have given Iran its main demands: lifting financial sanctions and unfreezing assets in return for talks on limiting its nuclear programme.

But that deal unravelled within weeks over shipping rules in the Strait of Hormuz, conduit for a fifth of global oil and liquefied natural gas before the war. Iran wants to exert control and collect fees from ships that use it, which Washington rejects.

In the latest reported attack in the strait, Britain's UKMTO maritime security agency said a cargo ship had been hit by projectiles, causing two casualties among the crew. The crew had been evacuated and the ship was on fire and adrift.

Despite near-daily attacks, traffic through the strait has picked up in recent weeks. Oil producers pay shipping companies fees of as much as a quarter of a cargo's value to take the wartime risk of sailing through the strait with transponders switched off, before transfering crude to other vessels on the far side.

Exports from the United Arab Emirates have already recovered to pre-war levels, and Saudi Arabia has sold 60 million barrels of Gulf oil for both this month and next, to be delivered beyond the strait off the coast of Oman.

Nevertheless, a third of Gulf oil is estimated to be missing from global supplies. Shortages have particularly hit refined products such as diesel, causing inflation, pushing up interest rates and hurting Trump's Republicans ahead of the elections.