Oil prices shoot up after US seizes Iran cargo ship

Oil prices surged Monday on a re-escalation of hostilities in the Middle East war after the US Navy fired on and seized an Iranian ship prompting warning from Tehran that it it would retaliate.

Iran closed the Strait of Hormuz at the weekend, just a day after reopening it, citing the United States' blockade of its ports.

However, lingering hopes that a deal to end the seven-week crisis continued to support equities, even as Tehran said it was not currently planning to attend peace talks in Islamabad.

Crude plunged while US and European stocks rallied Friday after the Islamic republic said it would again allow ships to pass through the waterway -- through which a fifth of global oil and LNG gas usually passes -- citing the ceasefire between Israel and Lebanon.

President Donald Trump told AFP that "we're very close to having a deal", adding that there were "no sticking points at all" left with Tehran, though Iran quickly pushed back, saying its stockpile of enriched uranium would not be transferred "anywhere".

US benchmark West Texas Intermediate dived more than 11 percent and Brent shed nine percent.

But both contracts jumped sharply Monday, days before the end of a two-week ceasefire, owing to the ongoing US blockade and after an American destroyer fired on and seized an Iranian ship that tried to evade it. Tehran warned it would retaliate.

The blockade of Iranian ports has been a significant sticking point in negotiations between the two countries, and state broadcaster IRIB cited Iranian sources as saying "there are currently no plans to participate in the next round of Iran-US talks" in Pakistan.

The Fars and Tasnim news agencies had earlier cited anonymous sources as saying "the overall atmosphere cannot be assessed as very positive", adding that lifting the US blockade was a precondition for negotiations.

WTI jumped more than seven percent at one point, while Brent piled on more than six percent.

There has so far been only a single, 21-hour negotiating session held in Islamabad on April 11 that ended inconclusively, though groundwork for fresh talks continued afterwards.

"We're offering a very fair and reasonable DEAL, and I hope they take it," Trump said in a social media post Sunday, while also renewing his threats against Iran's infrastructure if a deal is not made.

But Iran's Revolutionary Guards warned that any attempt to pass through the strait without permission "will be considered cooperation with the enemy, and the offending vessel will be targeted".

Foreign ministry spokesman Esmaeil Baqaei said the blockade was "a violation" of the ceasefire.

Iran not planning to attend talks

Iran is not currently planning to attend talks with the United States, state media said, after President Donald Trump ordered US negotiators to travel to Pakistan on Monday, just days before a ceasefire in the Middle East expires.

The ongoing US blockade of Iranian ports has been a significant sticking point, an issue further complicated by an American destroyer on Sunday firing on and seizing an Iranian ship that tried to evade it. Tehran warned it would retaliate.

State broadcaster IRIB on Sunday cited Iranian sources as saying "there are currently no plans to participate in the next round of Iran-US talks".

The Fars and Tasnim news agencies had earlier cited anonymous sources as saying "the overall atmosphere cannot be assessed as very positive", adding that lifting the US blockade was a precondition for negotiations.

State-run IRNA meanwhile pointed to the blockade and Washington's "unreasonable and unrealistic demands", saying that "in these circumstances, there is no clear prospect of fruitful negotiations".

The benchmark US oil contract West Texas Intermediate (WTI) surged 7.5 percent on Monday, while international oil benchmark Brent North Sea crude gained 6.5 percent.

Iran and the United States, along with Israel, are just days away from the end of the two-week ceasefire that halted the Middle East war, ignited by surprise US-Israeli strikes on Iran on February 28.

There has so far been only a single, 21-hour negotiating session held in Islamabad on April 11 that ended inconclusively, though groundwork for fresh talks continued afterwards.

"We're offering a very fair and reasonable DEAL, and I hope they take it," Trump said in a post on Sunday, while also renewing his threats against Iran's infrastructure if a deal is not made.

Thousands have rallied in Tehran in support of Iran’s government, with participants voicing a 'complete distrust' towards the US and urging Iranian officials not to back down. It was held hours before Iran's armed forces vowed to respond to a US attack on an Iranian ship. pic.twitter.com/Vu7Z92nxE3

— Al Jazeera English (@AJEnglish) April 20, 2026

- US fires on Iranian ship -

Trump has been under pressure to find an off-ramp since Tehran moved early in the war to choke off the Strait of Hormuz.

The vital waterway is a conduit for a fifth of the world's oil and liquefied natural gas in peacetime, and its closure has hammered the global economy and roiled markets.

Having failed to force it open again, Trump countered with a US naval blockade on Iranian ports in an attempt to cut off Tehran's oil revenues.

On Sunday, he announced that a massive Iranian-flagged cargo ship "tried to get past our Naval Blockade, and it did not go well for them."

A US destroyer warned the ship to stop and then forced it to by "by blowing a hole in the engineroom", Trump said, adding: "Right now, U.S. Marines have custody of the vessel."

Trump said the Iranian-flagged ship, Touska, is under US Treasury sanctions "because of prior history of illegal activity."

The ISNA news agency later cited a spokesperson for Iran's central command centre as warning that "the armed forces of the Islamic Republic of Iran will soon respond and retaliate against this armed piracy and the US military".

Iran had briefly reopened the strait on Friday in recognition of an Israel-Hezbollah ceasefire in Lebanon, but closed it again the following day in response to the United States maintaining its blockade.

Iran's Revolutionary Guards warned that any attempt to pass through the strait without permission "will be considered cooperation with the enemy, and the offending vessel will be targeted".

Iranian foreign ministry spokesman Esmaeil Baqaei on Sunday said the blockade was "a violation" of the ceasefire and illegal collective punishment of the Iranian people.

A handful of oil and gas tankers had crossed the strait early on Saturday during the brief reopening, but by early Sunday morning tracking data showed the waterway empty of shipping.

The afternoon before, a trio of incidents involving Iranian fire and threats towards commercial vessels demonstrated the danger of any attempted crossing.

JUST IN: Video shows U.S. forces firing on an Iranian-flagged vessel after it violated a maritime blockade in the Arabian Sea.

The USS Spruance targeted the ship's engine room after multiple warnings during a six-hour standoff before Marines boarded and seized the vessel. pic.twitter.com/DjsFUkM0k7

— Fox News (@FoxNews) April 19, 2026

- Syria foiled Hezbollah attack -

Syria's interior ministry said Sunday that security forces had thwarted a cross-border attack in the southern Quneitra province by a cell linked to Lebanon's Iran-backed Hezbollah group, which denied the accusation.

In a statement, Syrian officials said they foiled a "sabotage plot" with hidden rocket launching equipment in a civilian vehicle, which was linked to Hezbollah and "aimed to destabilise the region".

The area borders the Israeli-occupied Golan Heights.

- US negotiators going to Pakistan -

Trump said US negotiators will be in Pakistan Monday to resume talks on ending the war with Iran, as he again threatened to destroy its power plants and bridges if no deal is reached.

Trump did not say who would lead the delegation, but a White House official said it was Vice President JD Vance, who led the last set of talks that failed to reach an accord.

Trump said in a social media post he was offering Iran "a reasonable deal" but if Tehran refuses, "the United States is going to knock out every single Power Plant, and every single Bridge, in Iran. NO MORE MR. NICE GUY!"

- Lebanon PM to Paris -

French President Emmanuel Macron will on Tuesday meet with Lebanese Prime Minister Nawaf Salam in Paris, his office announced, a day after a French peacekeeper was killed in Lebanon and amid a fragile 10-day truce between Israel and Iran-backed militant group Hezbollah.

- Israel warns 'full force' -

Israel's Defence Minister Israel Katz said his military will use "full force" in Lebanon -- even during the ongoing ceasefire -- should Israeli troops face any threat from Hezbollah.

Lebanon's military said meanwhile it has reopened a road and bridge between the city of Nabatieh and Khardali that was damaged by Israeli strikes in the south.

- Iranian airport reopens -

Iran will resume international flights on Monday from Mashhad airport in the country's northeast, its civil aviation authority said.

- Turkey hopes for extension -

Turkey's Foreign Minister Hakan Fidan said on Sunday he was "optimistic" that a two-week ceasefire between Iran and the United States that expires on Wednesday, would be extended, allowing more time for talks between the sides.