Oil retreats as reports point to revived US-Iran talks on amended seven-day Hormuz plan

Mediators are expected to hold separate meetings with Washington and Tehran, as US-Iran diplomatic efforts could restart as soon as Monday or Tuesday, according to an official familiar with the discussions.

Iranian Foreign Minister Araghchi and the Qatari mediators are anticipated to stay in the US while the negotiations unfold. Reportedly at the center of the talks is a revised form of Iran's seven-day plan to reopen the Strait of Hormuz, a proposal the country put forward on the margins of the UN General Assembly.

The news follows a weekend in which expectations for a diplomatic resolution were rekindled, only to be dashed by Trump's refusal to accept Iran's original offer. The prospect of talks returning offers markets another flicker of optimism.

Attention will center on whether the revised proposal is able to reconcile the gaps separating the US and Iranian positions. Significant headway would help allay fears of an extended turmoil in the Middle East and exert downward force on crude valuations. On the other hand, an inability to advance would keep the market susceptible to ongoing geopolitical and supply uncertainties, sustaining a bid under petroleum prices.