Hormuz deadlock pushes oil prices higher as hopes for peace deal dwindle

Iran signals continued resolve in face of US pressure

First responders gather at the scene of an Israeli bombardment that hit their ambulances in the village of Arnoun in southern Lebanon on Tuesday. Photograph: AFP via Getty Images
First responders gather at the scene of an Israeli bombardment that hit their ambulances in the village of Arnoun in southern Lebanon on Tuesday. Photograph: AFP via Getty Images

Hopes for a peace deal on Iran dwindled on Tuesday after Donald Trump said ‌a ceasefire was “on life support”. His remarks came as Tehran rejected a US proposal to end the conflict and stuck to a list of demands the US president described as “garbage”.

Iran has called for an end to the war on all fronts, including Lebanon, where US ​ally Israel is fighting Iran-backed Hizbullah militants. Tehran also emphasised its sovereignty over the Strait of Hormuz, demanded compensation for war damage, and an end to the US naval blockade, among other conditions.

Trump said Iran’s response threatened the status of a ceasefire announced on April 7th.

“I would call it the weakest right now, after reading that piece of garbage they sent us. I didn’t even finish reading it,” Trump, who has repeatedly threatened to end the ceasefire, told reporters.

The US had proposed an end to fighting before ​starting talks on more contentious issues, including Iran’s nuclear programme. In Washington, the Pentagon put the cost of the war at $29 billion so far, an increase of $4 billion from an estimate provided late last month.

Brent crude oil futures extended gains on Tuesday, climbing to almost $108 a ⁠barrel, as the deadlock left the Strait of Hormuz largely closed. Before the war began on February 28th, the narrow waterway carried a fifth of the world’s oil and liquefied natural gas ‌shipments, ‌and ​has since become a central pressure point in the conflict.

A man standing on the beach in Tyre, Lebanon, watches as smoke rises from the site of an Israeli airstrike in Ras Al-Ain on Tuesday. Photograph: Kawnat Haju/AFP via Getty Images
A man standing on the beach in Tyre, Lebanon, watches as smoke rises from the site of an Israeli airstrike in Ras Al-Ain on Tuesday. Photograph: Kawnat Haju/AFP via Getty Images

US Central Command said the aircraft carrier Abraham Lincoln was in the Arabian Sea continuing to enforce the US blockade against Iran, having redirected 65 commercial vessels and disabled four.

US ally Kuwait announced the arrest of four infiltrators affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC) after they attempted to ⁠enter the Gulf state by sea, according to the state news agency Kuna, citing the ​interior ministry. There was no immediate reaction from Iran to the report.

Iranian officials meanwhile ​issued statements signalling continued resolve in the face of US pressure.

$7 gas and a doomsday plane flies overhead - yet war feels oddly distant in San FranciscoOpens in new window ]

A Fars news agency report cited Mohammad Akbarzadeh, deputy political director of the IRGC navy, as saying Iran had expanded its definition of the ‌Strait of Hormuz into a “vast operational area” under a new plan.

There was no ​immediate reply from Iranian authorities to a request for comment on Akbarzadeh’s remarks, which defined the waterway as a zone stretching from the coast of the city of Jask in the east to Siri ⁠island in the west.

In a post on X, parliamentary national security and foreign policy commission ⁠spokesperson Ebrahim Rezaei said Iran could enrich uranium up ​to 90 per cent purity, a level considered weapons grade, if the country is attacked once more.

In Tehran, the IRGC held drills “centred on preparation to confront the enemy”, state TV reported.

The US on Monday imposed new sanctions on individuals and companies it said were helping Iran ship oil to China – part of efforts to cut off funding for Tehran’s military and nuclear programmes – while also warning banks about attempts to evade existing curbs.

Trump is expected to arrive in Beijing on Wednesday, where Iran is set to be among the topics discussed with Chinese president Xi Jinping.

Trump says he will discuss Taiwan arms sales and jailed Hong Kong tycoon Jimmy Lai with XiOpens in new window ]

Traffic through the Strait of Hormuz is at a trickle compared with before the war. Shipping data on Kpler and LSEG showed that three tankers laden with crude exited the waterway last week, with trackers switched off to avoid an Iranian attack.

In the US surveys show the war is unpopular with voters, who are paying higher prices for fuel less than six months before nationwide elections ‌that will determine whether Trump’s Republican Party retains control ⁠of Congress.

Two out of three Americans, including one in three Republicans and almost all Democrats, think Trump has not clearly explained why the country has gone to war, according to a Reuters/Ipsos poll completed on Monday.

Trump said he would suspend the federal tax on gasoline until it was “appropriate”, to help reduce fuel prices. “As soon as this is over with Iran, ‌as soon as it’s over, you’re going to see gasoline and oil drop like a rock,” he said.

In the Qatari capital Doha, visiting Turkish foreign minister Hakan Fidan said his country supported efforts to reopen the Strait of Hormuz, adding that the ​channel should not be used as a “weapon” during the Iran war.

Washington has struggled to build international support, with Nato allies refusing to send ships ​to reopen the waterway without a full peace deal and an internationally mandated mission.

The US state department said on Monday secretary of state Marco Rubio held separate calls with his Australian and British counterparts to discuss “efforts to restore freedom of navigation in the Strait of Hormuz”. It did not elaborate. – Reuters

  • Understand world events with Denis Staunton's Global Briefing newsletter

  • Join The Irish Times on WhatsApp and stay up to date

  • Listen to In The News podcast daily for a deep dive on the stories that matter