• Iran's president warns 'we are not afraid of fighting' as he arrives in New York for the U.N. General Assembly, balancing deterrence with indirect diplomacy.
  • Oil prices ease slightly but remain elevated near $99 a barrel as markets watch for signs of de-escalation or renewed conflict.
  • Tehran floats reopening the Strait of Hormuz if Washington eases pressure, but military rhetoric from the Revolutionary Guard heightens uncertainty.

Iranian President Masoud Pezeshkian arrived in New York for the U.N. General Assembly with a blunt message: "We are not afraid of fighting." The statement, delivered before he left Tehran, is a calculated mix of defiance and deterrence as Iran seeks to prevent a wider war while projecting resolve to domestic hard-liners.

Pezeshkian is scheduled to address the General Assembly on September 23, where he is expected to accuse the United States of using force, violating ceasefires, and harming civilians. Yet behind the combative rhetoric, Tehran has signaled it does not want war and will not yield to coercion. Reports indicate U.S. and Iranian representatives have been engaged in indirect contacts in New York, according to people familiar with the matter.

The diplomatic track has a concrete focus: the Strait of Hormuz. Iran has reportedly floated reopening the passage more fully if Washington eases pressure on Iranian ports and reduces related military operations. The chokepoint is critical for global energy flows—before the seven-month conflict began with U.S.-Israeli strikes on Iran in late February, about 20% of global oil supply moved through it.

Economic Ripple Effects

Oil markets have been whipsawed by the mixed signals. Brent crude traded around $99.41 a barrel early on September 23, down from a spike above $108 earlier this month, as hopes for diplomacy and recovering Gulf supply eased immediate panic. West Texas Intermediate stood near $90.02. Saudi Arabia has helped offset disruptions by rerouting about 4 million barrels a day via the East-West pipeline to Yanbu—roughly 4% of global supply—but the fragility of alternative routes was underscored by recent Houthi attacks on Saudi oil infrastructure.

The human and economic toll inside Iran is mounting. The country's GDP reportedly contracted 10.1% year-on-year in the late March–late June period, hammered by war damage, sanctions, and trade disruption. Domestically, Pezeshkian faces pressure from hard-line factions who warn against appearing to compromise, even as the public grows weary of economic hardship.

The military backdrop remains tense. Iran's Revolutionary Guard has warned that a fresh U.S. attack could trigger a counteroffensive using different weapons and targets, potentially widening the conflict. That threat looms over the U.N. gathering, where mediators including Qatar, Saudi Arabia, Egypt, Pakistan, and Turkey are working to push a U.S.-Iran arrangement.

"We have a constant balance with the banks, which really we consider our partners and not only our binary competitors," said one European private credit executive, speaking about a different matter. The quote is not directly related to the Iran situation but illustrates the type of behind-the-scenes financial diplomacy taking place.

The next few days are pivotal. A diplomatic signal—reduced attacks near Hormuz, clearer rules for commercial shipping, or a mediated framework for talks—could further lower the oil-risk premium. Conversely, any misinterpreted military movement or tanker incident could quickly reverse market calm. As JPMorgan (JPM) noted, roughly 10 million barrels per day of supply has been disrupted, leaving no clear baseline for oil prices.

In short, Pezeshkian's language is both a warning and a negotiating posture: Iran will resist renewed pressure, but it is also using the U.N. stage and regional mediators to search for an off-ramp. For now, investors and policymakers alike are watching the Strait—and the rhetoric—for signs of which path prevails.

Correction: An earlier version of this article misstated the date of Pezeshkian's scheduled U.N. address. It is September 23, not September 22.