US-Iran peace talks in jeopardy as tensions rise over Hormuz

20th Apr 2026 10:13

(Sharecast News) - The fragile ceasefire between Iran and the US was under strain on Monday after tensions between the two increased over the weekend in the Strait of Hormuz, leading to more bombing threats from US President Donald Trump and sending share markets falling.

Initial euphoria that the key strait would reopen to shipping quickly vanished after the US said its blockade on Iranian shipping would remain in place despite Tehran lifting its own restrictions on commercial traffic.

Matters soon escalated as Iran reimposed its blockade and fired on vessels transiting the key waterway. In response, US President Donald Trump on Sunday said an American destroyer had fired on and disabled an Iranian-flagged vessel in the Gulf of Oman before it was boarded and seized by marines.

By Monday, stock markets were falling and crude oil prices start to shift northwards again as Tehran warned it would retaliate for the seizure of the cargo ship and would not attend a second round of peace talks in Pakistan.

Trump renewed threats to attack civilian infrastructure - which many experts regard a war crime - vowing to knock out "every single power plant" and "every single bridge" if Iran did not agree to his terms.

Iranian foreign ministry spokesperson, Esmaeil Baghaei on Monday told a press briefing. "While claiming diplomacy and readiness for negotiations, the US is carrying out behaviours that do not in any way indicate seriousness in pursuing a diplomatic process."

Baghaei said the cargo ship seizure, continued blockade on Iranian ports and delays in implementing a ceasefire in Lebanon were all "clear violations" of the ceasefire.

Tehran was also angered by Trump's unfounded claim that it had agreed to hand over its stockpile of enriched uranium.

"Today's jump in oil prices and the pullback in stocks is a reminder that the current ceasefire that expires on Wednesday is fragile. The latest round of peace talks in Pakistan scheduled for Monday are now in jeopardy. Although a US delegation is in the region, Iran has rebuffed these talks, and it is unclear if they will take place," said XTB research director Kathleen Brooks.

"Failed negotiations at this stage is problematic since it is an obstacle to negotiating a longer ceasefire, the current one expires on Wednesday. Unless relations between the US and Iran improve in the next two days, we could see a resumption of the bombing campaigns from both sides, and more volatility for financial markets."

Reporting by Frank Prenesti for Sharecast.com