seized ship, vessel attacks push U.S.-Iran ceasefire toward brink

Fifty days into the U.S.-Israel war with Iran, tensions escalated again after clashes in the Gulf prolonged shipping disruptions and cast doubt on a fragile ceasefire set to expire this week.

On Friday, Iran declared the Strait of Hormuz fully open to commercial traffic, sending crude prices tumbling more than 10%. By Saturday, hopes for a fully opened artery quickly unraveled as Tehran reimposed closure of the chokepoint, after President Donald Trump refused to end the U.S. naval blockade of Iranian ports.

After a brief pickup in transit attempts on Saturday, shipping traffic in the Gulf stalled once again, with vessels coming under fire mid-passage and being forced to withdraw.

On Sunday, the U.S. Navy fired on and seized an Iranian container ship in the Gulf of Oman. Trump called Iran’s actions over the weekend a “total violation” of the truce and renewed threats to strike Iranian power plants and bridges if Tehran refuses a deal.

For markets, it was a reminder of the fragility of the two-week ceasefire, and a deal that could bring a lasting end to the war is still far from done.

U.S. stock futures fell while crude oil prices surged as the U.S. and Iran teetered on the brink of a renewed conflict. West Texas Intermediate futures jumped more than 6% to $89 per barrel shortly after midnight on Monday while and the international benchmark Brent climbed 5.6% to $95.50 a barrel.

“We had the most violent day in the strait on Saturday that we’ve had since the beginning of this crisis, and things don’t seem to be getting any better,” said Rory Johnston, founder of Commodity Context.

“While we keep getting these sell-offs and it keeps seeming like we’re about to finally get that, the football — Lucy pulls it away — and we’re back to where we started,” Johnston told CNBC’s “Squawk Box Asia” on Monday.

“The strait still isn’t flowing, and 13 million barrels a day of production remains shut-in. We’re losing it every single day this goes on,” said Johnston, who is also a lecturer at the University of Toronto’s Munk School of Global Affairs and Public Policy.

Much will hinge on whether the U.S. and Iran will meet for a second round of peace negotiations in Pakistan later this week, as the ceasefire is set to expire on Tuesday.

Trump said that the American and Iranian negotiators would resume talks in Islamabad on Monday. Iran, however, has denied that it would participate in the meeting, citing what it called Washington’s “excessive demands, unrealistic expectations, constant shifts in stance” and the ongoing blockade as a breach of the ceasefire.

The first round of talks on Apr.12 between Vice President JD Vance and Iranian Foreign Minister…