Iran has warned that any new Israeli military action would carry severe economic consequences for energy markets, even as its foreign minister insisted Tehran is still giving diplomacy a chance to end the eight-month war with the United States and Israel.

Diplomacy running alongside military warnings

Foreign Minister Abbas Araghchi said on Wednesday that Iran remained in close contact with intermediaries over ideas that could put its seven-day plan into effect in less than a week. The plan would end the war and reopen the Strait of Hormuz, the waterway through which roughly a fifth of global oil and liquid gas supplies moved before the conflict began in February.

Tehran's conditions, as reported, include a comprehensive ceasefire across the Middle East, the unfreezing of Iranian assets held abroad, the lifting of sanctions on its oil sector and an end to the US naval blockade.

In a statement posted on X, Araghchi wrote that the devastating impact on international markets of any Israel-instigated military misadventure in the Persian Gulf region remains a major concern for both gas suppliers and consumers. The warning comes as Washington and Jerusalem are reported to be weighing renewed strikes after the US midterm elections on 3 November, if no last-minute deal is reached. Araghchi said Iran's armed forces were fully prepared to defend the country.

Qatari mediators, working alongside Pakistan, have been trying to broker a deal, but a senior Iranian official told Reuters this week that Doha had presented only ideas Tehran considered unacceptable, rather than a formal offer. The two sides remain divided over sequencing: Washington wants Iran's nuclear programme addressed from the outset, while Tehran wants the blockade and oil sanctions lifted first.

Any fresh escalation in the Gulf would threaten shipping through Hormuz and the region's gas exports.

Sources: India Shipping News, Terror Monitor.