Main developments
The US is preparing to launch a naval blockade of the Strait of Hormuz from 10am eastern time (3pm London time) after Washington and Tehran failed to reach an agreement during weekend talks in Islamabad.
Iran has threatened to hit back against Gulf ports in retaliation against the looming blockade.
The embargo will target maritime traffic entering and exiting Iranian ports but not ships transiting the Strait of Hormuz between non-Iranian ports.
The US has issued a notice to mariners stating that its blockade will cover “the entirety of the Iranian coastline” including ports and oil terminals, and that it will apply to all ships “regardless of flag”.
Oil prices surged above $100 a barrel. Global stocks fell.
France and Britain will organise talks in the coming days with countries prepared to back a “multinational peaceful mission” to reopen the strait.
IMO chief criticises Trump plan to blockade Strait of Hormuz
The head of the International Maritime Organization hit out at Donald Trump’s plan for a Strait of Hormuz naval blockade, saying countries did not “have the right to blockade an international strait that is used for international navigation”.
The US is set to block Iranian ports and territorial waters in an effort to get Tehran to release ts stranglehold over the waterway. But IMO chief Arsenio Dominguez said such a move was against maritime law.
“Shipping continues to be used as collateral ,” he told journalists. “De-escalation is what’s going to help us address the crisis . . . additional restrictive measures don’t really help us.”
He also said he “needed more details” on how the blockade would affect shipping as it seemed the embargo was directed at Iranian ports.
US stocks slip but stock market reaction to blockade muted
US stocks slipped in early trading as oil traded above $100 a barrel following the collapse of negotiations between the US and Iran and Donald Trump’s plan to blockade Iranian shipping.
Wall Street’s blue-chip S&P 500 and the tech-heavy Nasdaq Composite both fell 0.3 per cent shortly after the opening bell.
Brent crude, the global oil benchmark, was 7 per cent higher at just under $102 a barrel.