Iran's foreign minister keeps indirect talks with the U.S. open; Iranian navy claims capture of underwater drone

Iran is sticking to its position that it would only reopen the crucial Strait of Hormuz if its conditions are met, despite a rebuke from U.S. President Donald Trump, while a senior Iranian military leader stressed his country's readiness to continue fighting.

Iran's Islamic Revolutionary Guard Corps on Sunday claimed that it seized an autonomous U.S. submarine.

"Our conditions are clear; any progress toward the opening of the Strait of Hormuz is contingent upon the fulfillment of these conditions, and we will not back down from them," Iranian Foreign Minister Abbas Araghchi said in a post on his Telegram channel translated by Google.

"During our meetings with mediators, these conditions were fully conveyed, explained, and elaborated upon, and the mediators, in turn, relayed them to the American side," he said on the sidelines of the United Nations General Assembly in New York.

Trump told reporters Saturday that he has rejected Iran's latest conditional proposal for reopening the Strait of Hormuz, through which about a fifth of the world's oil supplies moved before the start of the war. "They made a proposal but I rejected it."

The Wall Street Journal quoted unnamed U.S. officials as saying that Trump told aides he expects to resume bombing Iran after November's midterm elections.

Araghchi on Friday had proposed reopening the strait and resuming nuclear talks with the U.S. within seven days if the Trump administration accepts its conditions.

In his latest statement, Araghchi said intermediaries between the U.S. and Iran have yet to relay a formal response from Trump to Tehran. "Only a negotiated solution can break this deadlock," he said.

Tehran's conditions include a halt to what it calls U.S. "acts of aggression," an end to the naval blockade and economic warfare, and the release of Iranian assets, Iranian foreign ministry spokesman Esmaeil Baghaei said last week.

Iranian military leaders continued to underline their readiness to continue the war, which began on Feb. 28 with U.S. and Israeli air strikes on the country.

"The war is not over," the Iranian Student News Agency quoted Iran's army commander-in-chief, Amir Hatami, as saying. "We have won, but we must consolidate this victory, and the aggressor enemy, who has suffered heavy blows, must continue to be prepared to receive heavy blows from the soldiers of our beloved Iran," he said.

Meanwhile, the IRGC navy claimed Sunday to have captured an American underwater drone in the Strait of Hormuz.

"IRGC Navy forces successfully captured an advanced unmanned underwater vehicle (UUV) belonging to the U.S. terrorist army," the Tasnim News Agency said in a Telegram post quoting the IRGC.

It described the vehicle as a Remus 600 unmanned underwater vehicle and added that it has been handed over to the force's specialists for data recovery.

"The IRGC Navy firmly declares that the Strait of Hormuz is closed [to unauthorized traffic]," it said.

U.S. Central Command did not immediately respond to CNBC's emailed request for comment.

The war has severely restricted energy shipments out of the Middle East, sending oil prices soaring and raising concerns about accelerating inflation globally.

But crude prices posted a sharp drop for the week as Tehran and Washington held discussions on the sidelines of the U.N. General Assembly.

West Texas Intermediate dropped 2.3% to close at $92.41 per barrel. Brent, the international benchmark, declined 2.1% to settle at $104.32. U.S. crude finished the week 7.9% lower while Brent was flat.

WTI is up nearly 61% year to date, while Brent crude is more than 71% higher over the same period.