Trump Orders Hormuz Blockade After Iran Talks Collapse

The ceasefire that lifted global markets last week lasted five days. The peace talks that were supposed to make it permanent lasted 21 hours. Now comes the blockade.

President Donald Trump declared on Sunday that the US Navy would blockade the Strait of Hormuz “effective immediately,” hours after Vice President JD Vance left Islamabad without a deal following the highest-level face-to-face meeting between American and Iranian officials since the 1979 revolution. US Central Command confirmed that the blockade of all maritime traffic entering or exiting Iranian ports would begin Monday at 10:00 a.m. Eastern Time. Two guided-missile destroyers—the USS Michael Murphy and USS Frank E. Petersen Jr.—had already entered the strait on Saturday in what CENTCOM described as mine-clearing operations, as reported by NPR, CNBC, Axios, and Time.

What the Talks Produced—and What They Didn’t

The Islamabad negotiations, mediated by Pakistan and held at the Serena Hotel under extraordinary security, brought Vance, special envoy Steve Witkoff, and Jared Kushner face to face with Iranian Parliament Speaker Mohammad Bagher Ghalibaf. Trump wrote on Truth Social that “the meeting went well, most points were agreed to, but the only point that really mattered—NUCLEAR—was not.” Three impasses blocked progress: Iran’s refusal to abandon uranium enrichment, which Tehran insists is for civilian purposes; Iran’s demand to retain control over Hormuz navigation with new permanent rules; and the disposition of approximately $27 billion in frozen Iranian assets abroad. Secondary disputes over the Israeli offensive in Lebanon and war reparations further complicated the talks.

Vance framed the failure as Iran’s choice: “The bad news is that we didn’t reach a deal. And I think that’s much worse news for Iran than for the United States.” Iran’s Ghalibaf countered that Washington had made “excessive demands” and failed to earn Tehran’s trust. Pakistani Foreign Minister Ishaq Dar called the talks “intense and constructive” and left open the possibility of further rounds. Vance did not shut that door either: “We leave here with a very simple proposal. We’ll see if the Iranians accept it.”

The Blockade

Trump’s declaration went further than denying Iran the strait. He ordered the Navy to “seek and interdict every vessel in international waters that has paid a toll to Iran,” directly targeting Chinese, Indian, and Pakistani ships that have been among the few to transit under deals with Tehran. “No one who pays an illegal toll will have safe passage on the high seas,” he wrote. He called Iran’s control of the waterway “WORLD EXTORTION” and said the military would begin destroying the mines Iran placed in the strait. In a Fox News interview Sunday, Trump escalated further: “I could take out Iran in one day. In one hour, I could have their entire energy, everything, every one of their electric generating plants.” He added: “The only thing left is their water, which would be very devastating to hit.”

CNBC reported that CENTCOM clarified the blockade applies specifically to ships transiting to and from Iranian ports—not all strait traffic—a narrower scope than Trump’s initial declaration suggested. However, the Wall Street Journal reported that Trump is also considering resuming limited military strikes on Iran to break the stalemate, which would violate the two-week ceasefire. CENTCOM Vice Admiral Brad Cooper said additional forces, including underwater drones, would join the mine-clearing mission in the coming days.

Iran’s Response

The Islamic Revolutionary Guard Corps warned that US warships entering the strait would face a “deadly vortex” and that Iran retained full control of the waterway. Iranian state media claimed the American destroyers had been turned back after a warning—a claim CENTCOM denied. Iran’s new Supreme Leader Mojtaba Khamenei has repeatedly stated that the strait will operate under “new rules” and will not return to its pre-war status. The International Maritime Organization warned that approximately 20,000 sailors remain stranded aboard ships in the strait area, unable to leave in what the IMO secretary-general described as a “tense and volatile situation.”

What Markets Face Monday

Brent crude closed Friday at $95.20 after falling 12.7% on the week—the steepest weekly decline since 2022—as the ceasefire announcement triggered a selloff. But physical oil cargoes for immediate delivery were already trading above $140 per barrel, according to Bloomberg Línea, with 40 buy offers in the North Sea last week meeting only 4 sellers. The gap between futures and physical prices signals extreme supply stress that the blockade will intensify. JP Morgan estimates 9.1 million barrels per day of production remain offline. Saudi Arabia reported 600,000 bpd of production capacity lost to attacks and 700,000 bpd of pipeline capacity cut. For Latin American markets, the timing is devastating. The Ibovespa’s rally to 197,323 and the dollar’s drop to R$5.01 last week were built entirely on ceasefire optimism. That optimism is now gone. Brazil’s IPCA already accelerated to 4.14% in March, with gasoline up 4.59%. An oil spike above $100 on Monday morning would feed directly into April’s inflation print and narrow the Copom’s room for further rate cuts. The ceasefire expires April 21. The blockade starts Monday. The war, now in its seventh week, has entered a new phase.

Related Coverage: Ibovespa Hits 197K Record on Ceasefire Rally • COLCAP Holds as Brent Crashes 11% • Global Oil Flow at Risk: Strait of Hormuz