US proposes lifting Iran sanctions and canceling economic campaign in exchange for Hormuz reopening: report

The United States has offered to cancel its newly launched “Operation Economic Outcast,” lift all sanctions on Iran, and end its naval blockade in exchange for Tehran reopening the Strait of Hormuz and halting attacks by its regional proxies, according to a senior source cited by Al Arabiya.

The proposal was conveyed by Pakistan’s army chief, Field Marshal Asim Munir, during a recent visit to Tehran, the reports said.

Munir met with Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, in what was described as a “clear and decisive” discussion.

The offer is characterised as a separate proposal linked to efforts to revive elements of a June 2026 memorandum of understanding (MOU) between Washington and Tehran that had aimed to end hostilities and restore shipping through the critical waterway. 

According to the account, Washington’s terms centre on Iran guaranteeing free passage through the Strait of Hormuz — through which roughly 20 percent of global oil typically flows — and ending proxy attacks.

In return, the US would suspend or cancel the economic isolation campaign announced only days earlier by Treasury Secretary Scott Bessent, remove sanctions, and terminate the naval blockade of Iranian ports. 

Iran’s core demands, however, remain unchanged, as per the report.

Tehran continues to insist on $300 billion in US compensation, the complete lifting of all American sanctions, the release of all frozen Iranian assets (estimated at $100–123 billion), an end to the naval blockade, the withdrawal of US troops from the entire region, and a comprehensive regional ceasefire that includes Lebanon and Gaza. 

Operation Economic Outcast was unveiled on August 24 by Bessent as an aggressive secondary-sanctions campaign targeting Iran’s remaining economic lifelines in sectors including digital assets, technology, gold, aviation, and shipping.

The effort seeks to isolate the Iranian regime financially after months of conflict that included a US naval blockade and disruptions in the Strait of Hormuz.

Officials framed it as a shift from containment to forcing Tehran to choose between global isolation and a return to economic normalcy. 

The latest diplomatic channel through Pakistan comes amid a fragile and repeatedly disrupted negotiating process.

An earlier 60-day interim understanding in June had led to a temporary lifting of the US blockade and partial reopening of the strait, but the arrangement collapsed amid mutual accusations of violations.

Shipping traffic and oil markets have remained volatile as a result.

Iranian officials have not publicly detailed a formal response to the latest offer. Rezaei reportedly told Munir that Tehran would continue internal consultations.

Separately, Chinese officials have rejected any expectation that Beijing would alter its economic ties with Iran to comply with the new US sanctions push, emphasizing opposition to unilateral measures.

The Strait of Hormuz remains a pivotal chokepoint for global energy supplies. Any sustained agreement on free navigation would ease pressure on oil markets, while continued deadlock risks further economic and security escalation in the region.

Both sides have signaled willingness to talk through intermediaries, yet the gap between the reported US proposal and Iran’s maximalist conditions underscores the difficulty of reaching a durable settlement.