According to informed sources, the United States and Iran are considering further negotiations to extend a two-week truce agreement. The aim is to hold new talks before the current ceasefire, announced on April 7th, expires next week. Concurrently, US President Trump is advancing a naval blockade operation intended to curb Iran's oil exports, a move designed to pressure Iran into making concessions during peace negotiations.
President Trump stated at the White House on Monday morning, "This morning, the right and appropriate people called us; they want to make a deal." This comment came just hours after the US Navy began enforcing a blockade in the strategically vital Strait of Hormuz, cutting off vessel traffic to and from Iranian ports and coastal areas.
Following Trump's signal of willingness to resume talks, market expectations for a potential agreement to end the six-week conflict have increased. Stock markets responded positively. The MSCI World Index rose 0.4%, heading for an eighth consecutive day of gains, which would mark the longest winning streak since last September. Japan's Nikkei 225 index closed up 2.43%, South Korea's KOSPI index gained nearly 3%, while Chinese A-shares, Hong Kong stocks, and European markets also advanced. Futures for the three major US stock indices saw modest gains.
Meanwhile, oil prices declined. At the time of writing, Brent crude futures were down 1.00% at $98.37 per barrel, while WTI crude futures fell nearly 3% to $96.24 per barrel. Spot gold rose 0.71% to $4,774.10 per ounce, and spot silver increased 2.50% to $77.47 per ounce. The US dollar weakened against most currencies of the Group of Ten nations. US Treasury prices rose, with the yield on the 10-year note falling over 2 basis points to 4.275%, and the 2-year yield dropping nearly 2 basis points to 3.762%.
These developments indicate that both the US and Iran have not abandoned diplomatic efforts after failing to reach an agreement during initial talks over the weekend. According to the latest information, US and Iranian delegations are scheduled to negotiate later this week in Islamabad, Pakistan. Although the US and Israel have paused strikes on Iran, Israel continues its operations against Hezbollah in Lebanon. This conflict remains a key sticking point in broader ceasefire negotiations, with talks between Israel and Lebanon scheduled for Tuesday in Washington.
Tensions in the Strait of Hormuz have persisted since the US and Israel launched attacks on Iran on February 28th. The strait, a critical global energy transit chokepoint, has been almost entirely closed, with damage to multiple energy infrastructure sites in the Gulf region causing significant volatility in global energy markets and financial assets.
After the US-Iran talks failed to yield an agreement, President Trump stated on social media on April 12th that the US Navy would begin preventing vessels from entering or leaving Iranian ports via the Strait of Hormuz and would start "destroying" Iranian-laid mines in the strait. US Central Command stated it would begin a blockade of all maritime traffic to and from Iranian ports at 10:00 AM ET on April 13th. Media reports on April 13th, citing a senior US official, indicated that over 15 US naval vessels were positioned to support the operation since it began.
Iran has warned that it would target various ports along the Persian Gulf coast if its own shipping hubs are threatened, heightening risks of a broader conflict. A spokesperson for Iran's Armed Forces General Staff stated that Iran would firmly implement a "permanent mechanism for controlling the Strait of Hormuz" in the face of threats. The spokesperson added that if the security of Iran's ports in the Persian Gulf and Sea of Oman is threatened, then no port in those waters would be safe. Furthermore, the spokesperson stated that enemy vessels have no right to pass through the strait now or in the future, while other vessels would continue to be permitted passage subject to regulations set by Iranian armed forces.
Notably, Saudi Arabia is pressuring the US to abandon the Strait of Hormuz blockade and return to negotiations, due to concerns that the US action could prompt Iran to take escalatory steps that disrupt other vital shipping lanes. Reports citing Gulf state officials wrote, "Saudi Arabia has warned that Iran could retaliate by blockading the Bab el-Mandeb strait, a Red Sea passage crucial for Saudi Arabia's remaining oil exports." The report pointed out that despite disruptions in the Strait of Hormuz, Saudi Arabia has successfully restored oil exports to approximately 7 million barrels per day, pre-conflict levels, by transporting crude via pipelines across the desert to Red Sea ports. However, with Yemen's Houthi group controlling extensive coastline near the Bab el-Mandeb strait, Saudi oil exports would be at risk if the Red Sea exit route were closed. Reports citing Saudi energy officials stated that Saudi Arabia has obtained a commitment from the Houthis that the group will not attack Saudi vessels transiting the strait. But the report also suggested that if Iran applies further pressure, the Houthis might become more actively involved in the conflict, and "the Houthis could also begin charging fees for transit."
US Vice President Vance, who led the US delegation in the initial talks, indicated that the next steps depend on Iran. In an interview on Monday, he stated, "We did make some progress in the talks," adding that the discussions helped clarify both sides' red lines. When asked about the possibility of another round of talks, Vance said the question was "better directed to the Iranians, because the ball is really in their court."
Iran blamed the US for the breakdown of talks over the weekend but left the door open for further negotiations. According to a statement from the Iranian government's news portal, President Pezeshkian stated that Iran is prepared to continue negotiations within the framework of international law.
President Trump previously warned that the US would employ tactics similar to those used against vessels suspected of drug trafficking in the Caribbean in recent months against Iranian vessels. He posted on social media, "What we haven't struck are their so-called 'fast attack craft,' of which they have few, because we considered them low threat. Warning, if any of these vessels approach our blockade line, they will be immediately eliminated, using the very same strike system we use against drug runner boats in the sea."
Nevertheless, Trump attempted to downplay concerns about potential further shocks to global energy markets. In another post, he claimed that 34 vessels transited the Strait of Hormuz on Sunday, "the most since this foolish closure began." However, earlier media reports stated that 19 vessels passed through the waterway in both directions on Sunday.
The strategic contest between the US and Iran over control of the Strait of Hormuz adds risk to a global energy market already facing severe supply disruptions. Several market institutions have warned that an escalation of the Strait of Hormuz crisis, leading to a widening crude supply gap, would further push up international oil prices.
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