The US and Iran are weighing further negotiations to extend a two-week ceasefire as President Donald Trump presses ahead with a naval blockade to curb the Islamic Republic’s oil exports, a step aimed at extracting concessions in peace talks.
The objective is to hold fresh discussions before the truce announced April 7 expires next week, according to people familiar with the matter.
“We’ve been called this morning by the right people, the appropriate people, and they want to work a deal,” Trump said at the White House on Monday, hours after the US Navy began implementing the blockade of the strategic Strait of Hormuz to cut off vessels transiting to and from Iranian ports and coastal areas.
Stocks rose and oil fell after the president signaled willingness to resume talks, boosting expectations for a potential deal that could end the six-week war. The MSCI All Country World Index climbed 0.4 percent, heading for an eighth day of gains, which would be its longest winning streak since September. Asian shares followed Wall Street higher. Brent crude fell as much as 2.9 percent to $96.50 a barrel on Tuesday, and the dollar weakened against most of its Group-of-10 peers.
The latest push shows the two sides haven’t given up on diplomacy after their first round of direct negotiations in Pakistan failed to produce an agreement. The war, which began when the US and Israel launched a bombing campaign against Iran on Feb. 28, has left thousands dead, damaged infrastructure and disrupted energy flows beyond the Persian Gulf, rattling markets and triggering a global price spike.
Fighting has largely paused since the truce was agreed, but Trump’s blockade – announced after the inconclusive peace talks over the weekend – will test its durability.
“We can’t let a country blackmail or extort the world,” Trump said, warning Iran against charging fees for vessels to transit the strait.
A ship under US sanctions and linked to China is making its way through Hormuz, testing the blockade. The Rich Starry, a medium-range tanker earlier known as Full Star, is trying for the second time in less than 24 hours to exit the waterway.
Iran warned it would target ports across the Persian Gulf if its own shipping hubs are threatened, raising the risk of a wider confrontation. Its armed forces said security in the region must be “either for everyone or for no one,” and described any US move to block the strait “an act of piracy,” according to the state-run IRIB News.
Saudi Arabia, a key US partner, is pushing Washington to halt the blockade, fearing it could prompt Tehran to escalate tensions and disrupt other regional shipping routes, the Wall Street Journal reported, citing Arab officials it didn’t name.
Disruptions in the strait pose risks for China, which remains Iran’s largest oil customer and a key trade partner. Beijing has called for an immediate ceasefire, warning that a blockade threatens global trade.
Trump repeated claims that negotiations had failed due to Iran’s insistence on maintaining a nuclear program and stressed that any deal would require Tehran to abandon its atomic ambitions.
Vice President JD Vance, who led the US delegation in the first round of talks, left the next step to Tehran.
“We did make some progress in the negotiation,” he said in a Monday interview on Fox News, adding that the talks helped clarify red lines. Asked about another meeting, Vance said the question was “best put to the Iranians, because the ball really is in their court.”
The New York Times, citing people familiar with the talks, reported that the US proposed a 20-year suspension of nuclear activity, while Iran countered with a plan to halt it for as many as five years – similar to an offer made in February.
Iran blamed the collapse of talks over the weekend on the US, but left the door open for more negotiations. President Masoud Pezeshkian said Iran was prepared to continue discussions within a framework of international law, according to a statement on a government news portal.
Trump had warned shortly after the deadline passed that the US would target Iranian ships using the same tactics it did against alleged drug-running boats in the Caribbean Sea in recent months.
“What we have not hit are their small number of, what they call, ‘fast attack ships,’ because we did not consider them much of a threat. Warning: If any of these ships come anywhere close to our BLOCKADE, they will be immediately ELIMINATED, using the same system of kill that we use against the drug dealers on boats at Sea,” he said in a social-media post.
Still, Trump looked to downplay concerns around the further potential shock to global energy markets, claiming in a separate post that 34 ships had transited the strait on Sunday, “by far the highest number since this foolish closure began.” Bloomberg reported earlier that 19 vessels passed through the waterway in either direction on Sunday.
The US has warned it will intercept or divert vessels leaving Iran, while allowing neutral ships to pass, though they may be searched for contraband. The blockade will be enforced against vessels entering or departing Iranian ports, US Central Command said.
While the US and Israel have paused strikes on Iran, Israel continues its campaign in Lebanon against Hezbollah. The conflict remains a key sticking point in broader ceasefire negotiations, with talks between Israel and Lebanon set for Tuesday in Washington.
