US Military to Blockade Iranian Ports Following Collapse of Peace Talks in Islamabad

The United States military will begin a naval blockade of all Iranian ports and coastal areas at 10 a.m. EDT (1400 GMT) on Monday, April 13, 2026, after weekend peace talks between Washington and Tehran in Islamabad, Pakistan, collapsed without an agreement, sending oil prices surging above $100 a barrel and pushing Asian equity markets lower. U.S. Central Command said the blockade would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman." Vessels transiting the Strait of Hormuz to and from non-Iranian ports will not be impeded, the military said. President Donald Trump also announced that U.S. Navy forces would begin destroying mines that Iran had placed in the strait, and said American forces would intercept every vessel in international waters that had paid a toll to Iran. Benchmark U.S. crude jumped $8.38, or 8.7%, to $104.95 a barrel in Monday morning trading in Asia, while Brent crude rose $7.00, or 7.4%, to $102.23 a barrel.

The conflict between the United States and Iran began on February 28, 2026, with the launch of Operation Epic Fury, a joint U.S.-Israeli military campaign. A ceasefire took effect on Tuesday, April 7, 2026, following weeks of fighting that killed thousands of people across the Gulf, throttled energy supplies, and raised fears of a wider regional conflict. The Islamabad talks, which ran from Saturday into early Sunday, were the first direct U.S.-Iranian meeting in more than a decade and the highest-level discussions since Iran's 1979 Islamic Revolution. Brent crude had risen from roughly $70 per barrel before the war in late February to more than $119 at times during the conflict, before falling back to $95.20 on Friday ahead of the talks.

Trump posted on social media after the talks broke down, warning Tehran in stark terms.

„No one who pays an illegal toll will have safe passage on the high seas. Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!” — Donald Trump via Reuters

Iran's Islamic Revolutionary Guards warned after Trump's remarks that military vessels approaching the strait would be considered a ceasefire breach and dealt with "harshly and decisively." A U.S. official said Iran rejected Washington's demands for an end to all uranium enrichment, the dismantling of all major enrichment facilities, the transfer of highly enriched uranium, and the cessation of funding for Hamas, Hezbollah, and the Houthis. Iranian media reported that agreement had been reached on a number of issues, but that the strait and Iran's nuclear program were the main sticking points. Iranian Foreign Minister Abbas Araqchi said Iran had "encountered maximalism, shifting goalposts, and blockade" when just inches away from an agreement he described as an "Islamabad MoU."

„Zero lessons learned. Good will begets good will. Enmity begets enmity.” — Abbas Araqchi via Reuters

Oil analysts warn prices could reach $150 a barrel Market analysts warned that current oil price levels may not fully reflect the potential disruption if the blockade is fully enforced. Jorge Montepeque, Managing Director at Onyx Capital Group, said on Bloomberg Television that a supply loss of up to 12 million barrels per day was possible if both sides of the strait were blocked, and that the market's relatively calm reaction reflected trader disbelief that such a scenario would fully materialize.

„The number we saw this morning — $103; 8% increase — is not reflective at all of what could happen if the US really decides to go with this interdiction. It really makes no sense. It should be $140, $150.” — Jorge Montepeque via Bloomberg Business

Reuters and The Irish Times reported that experts described the blockade as an act of war requiring an open-ended commitment of a significant number of warships, and that removing Iranian exports could cut global supply by up to 2 million barrels per day. Soft commodities also rose sharply on concern about disruption to fuel and fertilizer supplies, while bonds were sold on inflation worries. Montepeque added that oil prices may stabilize around $100 a barrel for the rest of the year if Trump dials back some of his actions.

20% (of global energy supply) — share of world energy passing through Strait of Hormuz daily

2026-02-28: 70, 2026-03-15: 119, 2026-04-11: 95.20, 2026-04-13: 102.23

Asian markets slide as Hungary's forint surges on election shock Asian equity markets declined broadly on Monday as investors digested the collapse of the Islamabad talks and the imminent blockade. Japan's Nikkei 225 lost 1.0% in morning trading to 56,357.40, South Korea's Kospi dipped 1.1% to 5,795.15, and Hong Kong's Hang Seng slipped nearly 1.5% to 25,513.42, according to AP News. Australia's S&P/ASX 200 shed 0.5% to 8,913.50, while the Shanghai Composite fell 0.2% to 3,976.57. Neil Newman, Managing Director and Head of Strategy at Astris Advisory Japan, said in Hong Kong that the outcome of the talks fell short of market expectations.

„The outcome of the talks was not really what people were hoping for, that's for certain. As we stand here at the moment, it doesn't look very nice. Certainly, the oil prices are a big concern.” — Neil Newman via AP NEWS

Against the broader market weakness, Hungary's forint rose sharply after Viktor Orbán was defeated in Sunday's parliamentary election by the Tisza Party, led by Péter Magyar, according to Reuters. The forint's gain reflected expectations that the change in government could allow previously frozen EU funds to flow to Hungary and possibly to Ukraine. Wall Street had ended last week with a second consecutive weekly gain, with the S&P 500 closing at 6,816.89 on Friday, but those gains had been built on optimism over the weekend talks that was subsequently shattered.

Nikkei 225: -1.0, Hang Seng: -1.5, Kospi: -1.1, S&P/ASX 200: -0.5, Shanghai Composite: -0.2