The United States will begin a blockade of the Strait of Hormuz after peace talks with Iran collapsed, according to Donald Trump. Under the proposed measures, no vessels will be permitted to enter or exit the strategically vital oil corridor. Trump also stated that any ship found to have paid Iran for passage would be subject to interception.
In his first public remarks since JD Vance confirmed the breakdown in negotiations, Trump said that while most issues had been agreed during the talks, the central issue of Iran’s nuclear programme remained unresolved.
The failed negotiations, which reportedly lasted 21 hours in Islamabad, mark a sharp escalation in tensions between Washington and Tehran.
Trump added that the U.S. Navy has been instructed to interdict vessels in international waters that have paid transit tolls to Iran, as well as to begin clearing sea mines allegedly deployed in the strait. He also warned that any hostile action by Iranian forces would trigger a forceful military response.
While Trump indicated that other nations may participate in the blockade, no specific allies were named. The operation is expected to begin imminently, raising the risk of significant disruption to global energy markets given the Strait of Hormuz’s role as a key transit route.
Oil prices set to rise after US-Iran talks collapse
Oil prices are expected to move higher following the collapse of U.S.–Iran peace talks and Donald Trump’s pledge to blockade the Strait of Hormuz, raising the risk of renewed supply disruption.
Market positioning already reflects a bullish bias. Traders on IG expect U.S. crude to open around $98 per barrel on Monday, up from a Friday close of $96.57.
Meanwhile, Kirill Dmitriev suggested prices could surge as high as $150 per barrel if the situation deteriorates further.
However, not all analysts are convinced the rally will be sustained. Neil Wilson, investment strategist at Saxo UK, argued that markets may be increasingly desensitised to Trump’s rhetoric, with investors wary of overreacting to escalation threats.
He pointed to the persistence of the so-called “TACO” trade—“Trump Always Chickens Out”—where investors position for only limited upside in oil, anticipating that the administration may ultimately step back from implementing a full blockade.
