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As per the latest Financial Times (FT) report, published on early Wednesday morning in Asia, Iran is likely to get a bit of relief from the US when it comes to the arms embargo resolution.

Key quotes

Trump administration has backed away from a hardline resolution on Iran that risked alienating UN Security Council allies, and will instead present a “clean” version to extend an arms embargo due to expire in October.

The new proposed US resolution, seen by the Financial Times and due to be made public on Wednesday, comprised four terse paragraphs in place of the earlier 13-page draft circulated among members. It dropped tough language condemning past Iranian actions, attempting to enlist other countries to conduct vessel inspections and weapons seizures and listing specific Iranians for travel bans and asset freezes.

Despite the changes, Security Council members were still expected to reject the effort, which will aim to extend indefinitely an arms embargo on Iran due to end on October 18, when it was set to expire under the terms of a landmark nuclear deal agreed in 2015 with Tehran.

Washington had earlier hoped to persuade Estonia or Tunisia — Security Council members friendly to the US — to submit a compromise resolution. But last-minute talks on Monday and Tuesday with US diplomats failed to produce a result, and Washington determined to submit the resolution itself, according to two people briefed on the matter. 

The US mission requested comment from fellow members of the Security Council by 10 am on Wednesday. The vote could take place as soon as Thursday or Friday, according to a UN security diplomat.

Market implications

The news should ideally help the risk-tone sentiment and weigh on WTI as the US-Iran tussle was earlier unpinning the oil prices. Currently, S&P 500 Futures rises 0.10% to 3,340 but WTI seesaws around $41.90 after declining the previous day.