US blockade turns away 55 ships as Hormuz talks stall

The US military redirected 20 more commercial vessels away from Iranian ports last week, bringing the total to 55 ships turned away under the naval blockade, as talks to reopen the Strait of Hormuz remained stalled. American forces have also disabled two ships and boarded two to ensure compliance, according to US Central Command.

"There doesn't seem to be much of a compromise, which ultimately makes it more difficult to reach a sustainable deal," Warren Patterson, head of commodities strategy at ING Bank, said in a note Friday.

Brent crude jumped nearly 1 percent to $84.22 a barrel Monday, while West Texas Intermediate gained 0.6 percent to $78.63. Shipping traffic through the strait fell to eight confirmed crossings last Friday, down 33 percent from the day before, according to shipping tracker Kpler.

The waterway carried about a quarter of the world's seaborne oil trade and a fifth of global LNG before the war erupted Feb. 28. Iranian Foreign Minister Abbas Araghchi said Sunday there was "no possibility of restarting negotiations" while the US continues violating the June memorandum of understanding, leaving crude prices exposed to a prolonged supply disruption.

Iran's conditions harden

Iranian officials have set out sweeping demands for reopening the strait, including the US lifting its naval blockade and sanctions, withdrawing American troops from the region, paying war reparations and releasing frozen Iranian assets. Mohammad-Bagher Zolghadr, secretary of Iran's Supreme National Security Council, said the waterway would remain closed until Washington "corrects its behavior."

President Donald Trump, who projected confidence last week that a deal was near, told Axios he is prepared to wait for economic distress to mount in Iran, backing away from a renewed military offensive. "We are low keying it," Trump said. "We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money." The president also posted a chart on Truth Social showing the plunging value of the Iranian rial.

Oman track advances

Iran and Oman have been negotiating a temporary shipping route through the strait, with Araghchi saying the talks have reached their final stage. But he insisted the deal would not reopen the waterway, which remains contingent on separate conditions tied to US compensation. Oman confirmed the talks were progressing in "a positive and constructive atmosphere," while calling for a halt to repeated attacks on vessels transiting the strait.

The United Arab Emirates said Saturday that Iran launched a missile on an oil tanker owned by the Abu Dhabi National Oil Company while it attempted to transit the strait. Yemen's Iran-backed Houthi militia claimed responsibility Sunday for an attack on a Saudi Aramco oil refinery in Jizan, two days after Saudi Arabia, Turkey and Pakistan signed a mutual defense pact in Mecca.

Market implications

ING kept its forecast for Brent to average $80 a barrel this quarter, expecting flows to normalize through the third quarter, while flagging substantial "risk and uncertainty" to that baseline view. The bank said the tone of rhetoric and deepening distrust between Washington and Tehran leave scope for renewed deterioration.

The last time the strait faced sustained disruption was during the 1987-88 Tanker War, when US forces reflagged Kuwaiti tankers and ran the largest naval convoy operation since World War II. Iran backed down only after Operation Praying Mantis destroyed roughly half of its operational navy.

Treasury Secretary Scott Bessent said the strait would "never" return to the way it was, predicting that "more than 50 or 70 percent" of energy currently moving through the waterway would shift to underground pipelines over the next two years. The IEA's coordinated release of 400 million barrels in March — the largest in history — failed to keep oil prices below $100 a barrel because the physical supply gap was too large, according to the Council on Foreign Relations.

This article is for informational purposes only and does not constitute investment advice.