Main developments
The US announced it will launch a naval blockade of the Strait of Hormuz from 10am eastern time Monday after Washington and Tehran failed to reach an agreement during talks in Islamabad.
The embargo will target maritime traffic entering and exiting Iranian ports but not ships transiting the Strait of Hormuz between non-Iranian ports.
Oil prices surged above $100 a barrel when markets reopened on Sunday. S&P 500 and Nasdaq futures fell, setting the stage for losses on Monday.
Iran failed to give an “affirmative commitment” that it would refrain from seeking a nuclear weapon, US vice-president JD Vance said.
Trump’s threats to mount a blockade of the strait will have no effect on Iran, the Islamic republic’s officials said.
The UK would not be involved in a blockade, according to people familiar with the matter, after Trump said Nato members “want to help with the strait”.
Earlier Iran’s top negotiator said it was up to Washington to earn Tehran’s trust.
US stock futures slide ahead of Iran ports blockade
US stock futures fell on Sunday evening, setting the stage for losses on Monday, after Trump vowed a naval blockade of the Strait of Hormuz following failed negotiations over the weekend between the US and Iran.
S&P 500 futures fell 1 per cent and Nasdaq 100 futures fell 1.2 per cent at the market’s open.
Both of Wall Street’s main indices have risen since the end of March, when a diplomatic solution became more probable. The indices both extended their gains last week after the US and Iran announced a two-week ceasefire.
Oil rises above $100 a barrel in Asia after Iran talks fail
Oil prices surged above $100 a barrel when markets reopened on Sunday following the breakdown of US-Iran talks and plans by Donald Trump to blockade the Strait of Hormuz.
Brent crude, the international benchmark opened up 8 per cent at $102.60, while West Texas Intermediate also jumped by 8 per cent to $103.99.
Trump’s announcement of a naval blockade of the Strait of Hormuz from Monday is intended to pressure the Iran regime, which has continued shipping oil to key markets such as China during the conflict. But analysts warned a blockade could escalate the conflict.
“Blockading the strait supports higher oil prices for longer as it points to a more drawn out war,” said Michael Alfaro, chief investment officer of Gallo Partners, an energy and industrials focused hedge fund.
“A US blockade may work in the long term, but it creates complex uncertainty right now that requires a repricing of risk prompting higher oil prices.”
The oil market settled lower on Friday and Brent crude posted its steepest weekly loss since August 2022 due to optimism that the US-Iran peace talks could lead to a deal.