The deadline has come and gone for the initiation of a U.S. military blockade aimed at halting ships departing from Iranian ports. In response, Iran has issued warnings of potential reprisals against the ports of neighboring Gulf countries following unsuccessful weekend negotiations intended to resolve the ongoing conflict.

The situation has led to a spike in oil prices, with no indication of an immediate reopening of the Strait of Hormuz, exacerbating the largest ever disruption in oil supplies.

Since the conflict began on February 28, Iran has largely restricted the strait to its own vessels, allowing passage solely under its control and imposing a fee for transit.

U.S. President Donald Trump announced that American forces would intercept Iranian vessels and any ships that comply with Iran’s toll requirements. He further stated that any Iranian “fast-attack” boats approaching the blockade would be neutralized.

The U.S. Central Command confirmed the blockade’s implementation starting at 10 a.m. ET on Monday, which corresponds to 12 a.m. AEST on Tuesday.

NATO allies including the United Kingdom and France said they would not be drawn into the conflict by taking part in the blockade, stressing instead the need to reopen the waterway, through which about one-fifth of the world’s oil normally passes.

A ceasefire that halted six weeks of US and Israeli air strikes looked in jeopardy, with only a week left to run until 22 April.

The US said Iran rejected its demands at weekend talks in Pakistan’s capital, Islamabad, the highest-level discussions since Iran’s 1979 Islamic Revolution.

The US military’s regional Central Command said ‌the blockade would be “enforced impartially ‌against vessels of all nations” entering or ⁠leaving Iranian ports in the Gulf and the Gulf of Oman.

“The blockade will not impede neutral transit passage through the Strait of Hormuz to or from non-Iranian destinations,” Central Command said in a message to seafarers.

Two Iranian-linked tankers, the Aurora and New Future, laden with oil products, left the strait on Monday before the deadline, according to LSEG data.

An Iranian military spokesperson called any US restrictions on international shipping “piracy”, warning that if Iranian ports were threatened, no port in the Gulf or Gulf of Oman would be secure.

Any military vessels approaching the strait would violate the ceasefire, Iran’s Revolutionary Guards said.

Hezbollah urges Lebanon against Israel talks

On Monday, Hezbollah leader Naim Qassem urged Lebanon to cancel a planned meeting with Israel in Washington the following day, reiterating his group’s rejection of direct negotiations with its foe.

“We reject negotiations with the usurping Israeli entity … We call for a historic and heroic stance by cancelling this negotiating meeting,” Qassem, whose Iran-backed group has been at war with Israel since 2 March, said in a televised address.

The Lebanese and Israeli ambassadors to the US are scheduled to meet in Washington on Tuesday to discuss holding direct negotiations between the two countries.

Lebanese authorities have stressed that Beirut first wants to secure a ceasefire in the Israel-Hezbollah war, but Israel has dismissed that prospect, saying it prefers instead to focus on formal peace talks with Lebanon itself, with which it has technically been at war for decades.

Hezbollah’s request came as Israel claimed it had struck around 150 Hezbollah targets in Lebanon over the past 24 hours.

“In the past 24 hours, approximately 150 Hezbollah terrorist organisation targets were struck in numerous areas across southern Lebanon,” the Israeli military said, adding that the targets included “military structures, anti-tank missile launch points, and terror command centers”.

Tough outlook for energy markets

April could be a tougher month than March for energy markets and the economy due to the war in the Middle East, the head of the International Energy Agency (IEA) said on Monday.

While March saw the delivery of cargo from the region “loaded well before the crisis started”, IEA executive director Fatih Birol said “during the month of April, nothing has been loaded”.

“The longer the disruption is, the more severe the problem becomes,” he told reporters after a meeting at the International Monetary Fund (IMF).

His comments came as he met leaders of the IMF and World Bank on Monday as part of a group recently established to coordinate responses on the economic fallout from the war.

Birol said the agency was monitoring energy facilities in the region, noting that among over 80 impacted facilities, more than a third have been severely damaged.

He reiterated that the world is facing a major energy security challenge, adding that “no country is immune to this problem.”

Pakistan says US-Iran truce ‘holding’

Pakistan’s Prime Minister Shehbaz Sharif said a ceasefire between the United States and Iran was “holding” and that efforts were underway to reach an agreement after weekend talks failed to do so.

“The ceasefire is still holding and, as I speak, full efforts are underway to resolve the outstanding issues,” Sharif told a cabinet meeting in brief televised remarks.

— With additional reporting by Agence France-Presse.

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