U.S. blocks ships to or from Iran as the countries look for more ceasefire talks

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The war has damaged Gulf energy infrastructure and disrupted oil and gas supplies beyond the region, rattling markets and triggering fears of a global inflation crisis. About a fifth of the world’s oil and liquefied natural gas was shipped through Hormuz before the start of the war.

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Surging prices of products such as jet fuel and gasoline are already squeezing consumers, the International Energy Agency said on Tuesday, pointing toward the first annual decline in global oil demand since 2020.

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The latest push for talks shows the two sides haven’t given up on diplomacy despite the failure of the initial Pakistan negotiations.

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Vice President JD Vance at an event Tuesday said while there was progress in those talks, Trump doesn’t want to make “a small deal, he wants to make the grand bargain.”

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“The reason why the deal is not yet done is because the president, he really wants a deal where Iran doesn’t have a nuclear weapon, Iran is not state sponsoring terrorism, but also the people of Iran can thrive and prosper and join the world economy,” Vance said.

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Switzerland has said it’s ready to provide diplomatic support to efforts to end the conflict. The traditionally neutral country hosted talks about Iran’s nuclear program before the U.S. and Israel started bombing the Islamic Republic on Feb. 28.

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Fighting has largely paused since shortly after the April 7 truce was agreed, giving further cause for optimism. The exception is in Lebanon, where Israel is continuing its military campaign against Iran-backed Hezbollah.

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Talks between Israel and Lebanon began in Washington on Tuesday in an effort to resolve that parallel conflict, which has killed more than 2,000 people and displaced a million more, according to the Lebanese government.

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Yechiel Leiter, Israel’s ambassador to the U.S., told reporters that it was a productive session, with the two governments in line on freeing Lebanon from “occupation” by Hezbollah.

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The Rich Starry (in white) is currently transiting the Strait of Hormuz signalling Chinese ownership. The Elpis had passed through a few hours earlier. Photo by Bloomberg

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The talks are separate from the negotiations between the U.S. and Iran facilitated by Pakistan, and have been in the works for a month — prior to the confirmation of the discussions in Islamabad, according to a State Department official. The negotiations hosted in Washington are part of a broader effort to eliminate Iran’s influence over Lebanon via its proxy Hezbollah, the official said.

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Israel’s spy chief pledged more covert efforts to try to topple Iran’s government, suggesting the countries’ conflict will continue even if the U.S. agrees to a peace deal. “Our mission has yet to be completed,” David Barnea, the head of Mossad, said in a speech.

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Trump’s restrictions on Hormuz represent a further test of the ceasefire’s durability. The U.S. said six merchant vessels complied with instructions to turn around and re-enter an Iranian port during the first day of its blockade.

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“We can’t let a country blackmail or extort the world,” Trump said Monday, warning Iran against charging fees for vessels to transit the strait.

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A ship under U.S. sanctions and linked to China sailed out of Hormuz and into the Gulf of Oman, testing the blockade. It wasn’t clear if the Rich Starry, a medium-range tanker, visited Iranian ports before its transit.

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Blocking shipments through the strait poses risks for China, which remains Iran’s largest oil customer and a key trade partner. Beijing has called for an immediate ceasefire, warning that a blockade threatens global trade.

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Indian Prime Minister Narendra Modi said he spoke with Trump to discuss the strait. Its closure has been particularly problematic for India, a major importer of fuels from the region. The White House confirmed the call without providing further details.

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