Updates with details on US blockade of Iranian ports
The US says it will begin a naval blockade of Iranian ports starting on Monday, after talks between Washington and Tehran aimed at ending the fighting in the Middle East and reopening the strait of Hormuz faltered.
The US will institute a blockade against vessels from all nations entering or departing Iranian ports, including ports on the Mideast Gulf and the Gulf of Oman, beginning at 10am ET (14:00 GMT) on Monday, US Central Command said on Sunday.
US forces "will not impede freedom of navigation for vessels transiting the strait of Hormuz to and from non-Iranian ports", Central Command said.
US president Donald Trump earlier on Sunday had threatened to bar passage of ships cleared by Iran and to interdict any ship in international waters that had paid a toll for exiting the Mideast Gulf.
"No one who pays an illegal toll will have safe passage on the high seas," said Trump, who previously mulled joint US-Iranian control over the transit through Hormuz and access to any revenue collected from ships passing through it.
Ice Brent June futures jumped by around 8.8pc to $102.60/bl in early Asian trading on news of the US blockade.
Separately, the US on 11 April opted not to renew a sanctions waiver that had allowed purchases of Russian crude in floating storage, a decision that could further tighten global oil supplies.
Talks end without deal
Trump ordered the blockade after marathon talks over the weekend between US and Iranian negotiators in Islamabad, Pakistan, failed to achieve results.
US vice president JD Vance, who led the US delegation, blamed the lack of progress after 21 hours of negotiations on Iran's reluctance to renounce ambitions to develop a nuclear weapon. The Iranians refused to give up "the tools that would enable them to quickly achieve a nuclear weapon", Vance said. Tehran denies having a program to develop nuclear weapons.
Tehran did not provide a specific reason for the lack of results, but Iranian parliamentary speaker Mohammad Bagher Ghalibaf, who led his country's delegation, attributed the lack of a breakthrough to the US failing "to gain the trust of the Iranian delegation in this round of negotiations". Ghalibaf, ahead of the talks, had demanded a halt in the ongoing Israeli military operations in Lebanon and progress in unfreezing Iranian assets held under a US embargo in foreign banks as a precondition for success in negotiations.
The talks followed a ceasefire declared on 7 April, with Washington promising to halt its attacks on Iran while insisting Tehran reopen the strait of Hormuz.
But the waterway has largely remained under Iranian control, and the few ships that have passed through it appear to have either paid an unofficial toll to Tehran — believed to be the equivalent of $1/bl for crude tankers — or to have made other arrangements with the Iranian government. At least two Chinese very large crude carriers (VLCC) appear to have transited Hormuz on Sunday.
The US also accuses Iran of placing mines in at least some parts of the strait. The Pentagon said on Saturday that two US destroyers transited through the waterway into the Mideast Gulf "as part of a broader mission to ensure the strait is fully clear of sea mines previously laid by Iran's Islamic Revolutionary Guards Corps" (IRGC).
Tehran asserted that it had warned the two US warships against transiting Hormuz and that further attempts would draw a military response from Iran.
Iran also said that it would respond to a US naval blockade of Hormuz by encouraging Yemen's Houthis to resume attacks in the Bab al-Mandeb waterway connecting the Red Sea to the Indian Ocean, according to Iran's Tasnim news agency, which is linked to the IRGC.
A skiff with armed people aboard unsuccessfully attempted to board a sailing vessel in the Red Sea, just north of the Bab al-Mandeb, the UK Maritime Trade Operations said on Saturday.
What next?
Neither Iran nor the US has ruled out further talks, and Iran's willingness to negotiate directly with the US leaves some hope for a negotiated outcome. The ceasefire is nominally in place until 21 April and could be extended.
Ghalibaf headed a delegation that included Iranian security, diplomatic and economic officials and communicated willingness to negotiate substantive issues in a way that eluded contacts between the US and Iran since the end of former US president Barack Obama's administration.
But the two sides remain far apart, and Tehran and Washington each appears to believe that it holds leverage over the other. Iran has prioritized discussion of sanctions relief and the return of its frozen assets, in addition to formalizing its control over the waterway that under international maritime law should be free for passage.
The US' continued insistence on addressing Iran's nuclear program first precludes immediate results from the negotiations. It is not clear whether Iran's nuclear file was addressed in depth. While Vance brought along his national security advisers, there were no representatives from the UN nuclear watchdog the IAEA, who in the previous round of US-Iranian talks provided the technical expertise on Iran's nuclear program.
Trump, who previously said that the energy price spike triggered by the war in Iran would soon ease, took a different tack over the weekend. The blockade of Hormuz is a boon for US crude exporters, he said on Saturday: "The empty ships are rushing to the United States to 'load up.'"
Trump told Fox Business on Sunday that oil and gas prices "could be the same or maybe a little bit higher" by the November midterm congressional elections.
Israel, which is not party to the talks, also retains its ability to influence the future course of US-Iran relations by conducting military operations in Lebanon and elsewhere in the Middle East. The US-Iran negotiations also have excluded the Mideast Gulf states, even though their economies overwhelmingly depend on the freedom of navigation through the strait of Hormuz.
