Iran Halts U.S. Negotiations, Vows to Fully Block Strait of Hormuz

• Iranian negotiators will stop exchanging messages with the U.S. through intermediaries, and Tehran will move to fully close the Strait of Hormuz, in retaliation for ongoing ceasefire violations, Iran’s state-affiliated news outlet Tasnim said Monday.
• The report, in a translated post on the social media site Telegram, homed in on Israel’s military operations in Lebanon against the Iran-backed militia Hezbollah. “No dialogue will take place” until Israel fully withdraws from occupied areas in Lebanon and stops all attacks in both Lebanon and Gaza, per Tasnim. “Also, the resistance front and Iran have resolved to completely block the Strait of Hormuz and activate other fronts including the Bab al-Mandeb Strait, in order to punish the Zionists and their supporters,” the report said. The Bab el-Mandeb Strait is a trade chokepoint that connects the Red Sea to the Gulf of Aden.
• In response to this news, oil prices leapt more than 7% higher following Tasnim’s report, which signalled a breakdown in efforts to reach a diplomatic end to the war that is now in its fourth month. President Donald Trump just three days earlier said he would decide at a meeting in the White House Situation Room whether to agree to a deal with Iran that would at least pause the conflict, but that meeting ended without Trump making a final decision. In the following days, the U.S. and Iran launched new attacks against each other, further eroding the tattered ceasefire that has already been repeatedly ruptured by military operations.
• At the same time, Israel has ramped up its military offensive in Lebanon, with Prime Minister Benjamin Netanyahu on Monday ordering attacks on Hezbollah-controlled suburbs in Beirut, Reuters reported. Iranian Foreign Minister Abbas Araghchi said in an X post Monday morning that “the ceasefire between Iran and the US is unequivocally a ceasefire on all fronts, including in Lebanon,” adding that its violation on one front is a violation on all fronts and that the U.S. and Israel are responsible for the consequences of any violation. The White House did not immediately respond to a request for comment on Tasnim’s report, and U.S. Central Command declined to comment.
• Iran’s vow to escalate its clampdown on the Hormuz Strait indicates that oil exports from the Persian Gulf are unlikely to increase anytime soon. Exports through the strait have plunged from prewar levels due to Iran’s blockade.
• Barrel prices for Brent and WTI crude oil, while still highly elevated from their pre-war levels, had retreated by double-digit percentages in recent weeks as investors grew optimistic about the prospect of a deal that would fully reopen the strait, but some of that optimism appears to have evaporated following Monday’s developments.
• Ship traffic through the strait remains effectively choked off, as it has been since the start of the war, with only a trickle of vessels transiting the waterway compared with the more than 100 ships that passed through each day before the war, and Iran’s efforts to exert control have raised concerns that Tehran could impose a tolling system on passing ships.

(Source: CNBC)