The United States seized the Iranian-flagged cargo ship Touska on Sunday after it attempted to evade a naval blockade of Iranian ports, prompting Tehran to threaten retaliation and casting doubt on the prospects for renewed peace talks in Islamabad this week.
Iranian state media said there are currently no plans to participate in the next round of Iran-US negotiations, citing the ongoing US blockade of Iranian ports as a significant sticking point and Washington’s demands as unreasonable and unrealistic. The seizure of the Touska, which US forces said carried dual-use items and was under Treasury sanctions for prior illegal activity, was described by Iran as unlawful and a violation of international law. In response, Tasnim news agency reported that Tehran had sent drones in the direction of US military ships after the vessel was taken.
The two-week ceasefire that halted the Middle East war, ignited by surprise US-Israeli strikes on Iran on February 28, is set to expire early on Wednesday, April 22. US President Donald Trump said an extension is highly unlikely and warned that if a deal is not signed by the deadline, he may not extend the ceasefire and the US will have to start dropping bombs again. Trump had ordered US negotiators to travel to Pakistan on Monday, with Vice President JD Vance expected to head the US diplomatic delegation if talks proceed.
A single 21-hour negotiating session held in Islamabad on April 11 ended inconclusively, though groundwork for fresh talks continued afterwards. German Foreign Minister Johann Wadephul urged Iran to hold constructive talks with the United States in Islamabad, saying the US vice president is prepared to travel and that Iran should take up the offer for the sake of its own people. However, Iranian sources told state broadcasters IRIB and news agencies Fars and Tasnim that the overall atmosphere cannot be assessed as very positive and that lifting the US blockade is a precondition for negotiations.
The economic stakes are high, with the Strait of Hormuz serving as a conduit for a fifth of the world’s oil and liquefied natural gas in peacetime. Tehran’s earlier efforts to choke off the waterway hammered the global economy and roiled markets, prompting the US to impose a naval blockade on Iranian ports to cut off Tehran’s oil revenues. Oil prices fell and stocks bounced back in early trade in Asia on expectations that peace talks will resume, but analysts warn that a breakdown could push crude toward $200 per barrel.
A senior European Union security source told OilPrice.com that serious rifts exist between Iran’s Foreign Ministry and the Islamic Revolutionary Guards Corps, with the latter far less willing to make key concessions than the former. If no deal is reached by midweek but the ceasefire is extended, the US is likely to maintain a holding pattern, continuing its blockade of Iranian ports while reinforcing its position off the south coast of Iran with the USS George H.W. Bush aircraft carrier en route to the area.
The International Maritime Organisation is working on an evacuation plan for hundreds of ships stuck in the Gulf since US and Israeli strikes on Iran began more than seven weeks ago, but the plan can only be put into action when there are clear signs of de-escalation. Irish Tánaiste and Minister for Finance Simon Harris said that if Iran had not been bombed, Ireland’s growth forecast would have been upgraded in its spring forecast, citing the resilience of the Irish economy and the fiscal buffers in place despite stagflation risks.
What happens if the ceasefire expires without a deal?
If no deal is signed by the Wednesday deadline, President Trump said he may not extend the ceasefire and the US will have to start dropping bombs again, with a May 1 deadline looming for congressional approval to continue military operations under the War Powers Act.
Why is Iran refusing to attend talks in Islamabad?
Iran says it is not currently planning to participate in negotiations due to the ongoing US blockade of its ports and what it describes as Washington’s unreasonable and unrealistic demands, insisting that lifting the blockade is a precondition for talks.
How has the conflict affected global oil markets?
The closure of the Strait of Hormuz by Tehran and the US naval blockade on Iranian ports have disrupted a fifth of global oil and LNG flows, with analysts warning that a breakdown in talks could push crude prices toward $200 per barrel.
