Iran has vowed to keep the Strait of Hormuz shut unless the US meets its demands.
Tehran pointed to seven conditions set out in an agreement from June – insisting the country’s position remains ‘completely clear and firm’.
It follows the G7 agreeing on Friday to release emergency diesel stockpiles under pressure from Donald Trump, as global shortages saw prices rise above £2 a litre for the first time.
Iran’s parliament speaker Mohammad Baqer Qalibaf said: ‘The Americans, who say something different in the media, have recently put forward proposals through a mediator.
‘But they must understand that the period of dragging out the process and dictating one-sided demands is over.
‘The position of the Islamic Republic of Iran is completely clear and firm, and the Strait of Hormuz will not be opened until our seven conditions, based on the Islamabad Memorandum of Understanding, are met.’
The country’s Foreign Minister Abbas Araghchi added there is ‘no military solution’ to the war.
‘If our enemies again choose the path of military confrontation, our response will be stronger than before, and we will defend ourselves with even more force.
Iran’s parliament speaker Mohammad Baqer Qalibaf said: ‘The Americans, who say something different in the media, have recently put forward proposals through a mediator’ (file image)
‘There is no military solution, nor any solution based on new sanctions,’ he said.
Iran sought to impose control over the vital shipping lane following the start of the war and has since attacked vessels that attempt to transit without its authorisation.
The country previously offered to reopen the strait and resume nuclear talks in exchange for a series of US concessions, including lifting the naval blockade of Iranian ports.
Trump told reporters in late September that Tehran was now desperate to reopen the vital waterway because it was ‘losing so badly’, as he confirmed he had rejected its latest ceasefire proposal.
Calling Iran’s proposal ‘unacceptable,’ Trump claimed that the Middle Eastern country wanted to strike a deal ‘because they’re dying’ and ‘have no money coming in’.
Trump claimed the US was imposing the ‘greatest blockade ever in military history’, adding that Iran wanted to make a deal to ‘open the strait immediately because they’re losing so badly’.
The President also said the US was ‘winning tremendously’ and had ‘total control’ of the Strait of Hormuz, where around a fifth of the world’s traded oil flowed through every day prior to the Iran war.
‘Because they get their money from the Hormuz Strait, so they outsmarted themselves,’ Trump continued.
Trump claimed the US was imposing the ‘greatest blockade ever in military history,’ adding that Iran wanted to make a deal to ‘open the strait immediately because they’re losing so badly’
The President told aides that he expected to continue bombing Iran after the midterms in November.
Iranian Foreign Minister Abbas Araghchi had said the deal’s first steps would take roughly four to five days.
Under the suggested proposal, the strait would open on the sixth day. Talks with the US would resume on the final day of the deal.
But Trump warned during his address to the United Nations General Assembly that he could ‘annihilate’ Iran if a deal was not found to end the near-seven-month war.
‘Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before? Maybe one of the greatest in the Middle East or even the world?’ Trump said.
‘Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again?’ he added.
The US has not struck Iran since September 1.
G7 countries including Britain, France and Germany said they would release up to 100 million barrels starting immediately after the US threatened a diesel export ban.
European leaders had sought to defy the President’s demands over fears the continent could be left exposed to diesel price rises this winter if the Iran war drags on.
But after a meeting of G7 leaders, European countries gave in to Trump’s demands, with experts claiming the White House had ‘bullied’ them into acting.
Foreign Secretary Ed Miliband stood in for Andy Burnham on the call with world leaders, while the Prime Minister attended his father’s funeral.
Mr Miliband said: ‘G7 members have agreed co-ordinated measures to stabilise energy supplies, build resilience in supply chains and shield households and businesses from price shocks.’
There have been global shortages of diesel since the US launched its war with Iran in February. Vladimir Putin has banned exports following a series of Ukrainian attacks on Russian refineries, while China has also imposed export restrictions in response.
Trump demanded that Europe release diesel reserves into the market to lower fuel prices before US midterm elections next month. He had threatened to impose a US export ban that would risk further shortages if Europe didn’t act.
The threat of a diesel ban has seen prices surge and triggered panic in Whitehall, where officials have warned that the UK has as little as 40 days’ supply in reserve.
The average cost of diesel in Britain has surged by more than 40 per cent since the start of the US-Iran war and surpassed £2 on Friday. A litre of diesel is now on average 57.6p more expensive than on February 28 this year, when it cost 142.38p.
A Government source said: ‘The fact that we have these warnings from the US at the same time as ongoing disruption in the Strait of Hormuz and the Houthis trying to shut down exports via the Red Sea is pretty unhelpful and very concerning.’
Another source said officials were already working on contingency plans for potential diesel rationing if the US ban goes ahead and the Middle East crisis remains unresolved.
Britain is particularly exposed to shocks in diesel prices with its 40-day reserve and reliance on the US for a quarter of its imports. By comparison, the EU has about 80 days supply and France and Germany more than 200 days.