US seizes Iranian cargo ship as Tehran rejects a second round of peace talks

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WASHINGTON/ISLAMABAD - US President Donald Trump said on April 19 that the US military had seized an Iranian cargo ship that tried to run its blockade, and Iran said it would retaliate, raising the possibility that the ceasefire between the two countries might not last for even the two days it is set to remain in force.

Efforts to build a more lasting peace in the region likewise appeared to be on shaky ground, as Iran said it would not participate in a second round of negotiations that the US had hoped to kick off before the ceasefire expires on April 21.

A weeks-long blockade of shipping that has driven global oil prices higher likewise might remain in place.

The United States has maintained a blockade of Iranian ports, while Iran has lifted and then reimposed its own blockade of the Strait of Hormuz, which before the war began almost two months ago handled roughly one-fifth of the world’s oil supply.

The US military said on April 19 that it had fired on an Iranian-flagged cargo ship as the vessel sailed towards Iran’s Bandar Abbas port.

“We have full custody of their ship, and are seeing what’s on board!” President Trump wrote on social media, adding that US forces blew a hole in the vessel’s engine room.

Iran’s military said the ship had been travelling from China.

“We warn that the armed forces of the Islamic Republic of Iran will soon respond and retaliate against this armed piracy by the US military,” a military spokesperson said, according to state media.

Iran’s official IRNA state news agency also reported that Tehran had rejected new peace talks, citing the ongoing blockade and Washington’s shifting positions and “excessive demands.”

Mr Trump had earlier warned Iran that the US would destroy every bridge and power plant in Iran if Tehran rejects his terms, continuing a pattern of such threats throughout the war.

Iran has said that if the US were to attack its civilian infrastructure, it would hit power stations and desalination plants of Gulf Arab neighbours.

Brent crude futures jumped about 7 per cent to US$96.85 a barrel and S&P 500 futures fell about 0.9 per cent in early Asian trading, as investors dealt with conflicting messages about the war.

Vance to again lead talks

Mr Trump said his envoys would arrive in Islamabad on the evening of April 20, one day before a two-week ceasefire ends. A White House official had said the US delegation would be headed by Vice-President J.D. Vance, who led the war’s first peace talks a week ago, and also include Mr Trump’s envoy Steve Witkoff and son-in-law Jared Kushner. However, Mr Trump had separately told ABC News and MS Now that Mr Vance would not go.

Pakistan, which has served as the main mediator, appeared to be preparing for the talks. Two giant US C-17 cargo planes landed at an air base on April 19 afternoon, carrying security equipment and vehicles in preparation for the US delegation’s arrival, two Pakistani security sources said.

Municipal authorities in the capital city of Islamabad halted public transport and heavy-goods traffic through the city. Barbed wire was rolled out near the Serena Hotel, where last week’s talks were held. The hotel told all guests to leave.

The apparent diplomatic setback could set the stage for a renewed surge in oil prices when markets reopen after the weekend.

Now in its eighth week, the war has created the most severe shock to global energy supplies in history, sending oil prices surging because of the de facto closure of the strait.

Thousands of people have been killed by US-Israeli strikes on Iran and in an Israeli invasion of Lebanon conducted in parallel since the war began on Feb 28. Iran responded to the attacks with missiles and drones against its Arab neighbours that host US bases.

Iran’s chief negotiator, Mr Mohammad Baqer Ghalibaf, earlier said the two sides had made progress but were still far apart on nuclear issues and the strait.

European allies, repeatedly slammed by Mr Trump for not aiding his war effort, worry that Washington’s inexperienced US negotiating team is pushing for a swift, superficial deal that would grab headlines but leave months or years of technically complex follow-on talks.

Tankers reportedly turned back at strait

Two liquefied petroleum gas (LPG) tankers attempted to transit the Strait on the morning of April 18 but made a U-turn after reaching the waters south of Larak Island, MarineTraffic vessel tracking data showed.

Iran’s semi-official Tasnim news agency reported that the vessels were turned back by Iran’s armed forces.

One of the tankers – the Angola-flagged LPG tanker G Summer – later exited the Gulf on a second attempt on the evening of April 18, signalling “China owner”, according to the data.

The April 17 announcement that the strait would reopen caused the sharpest one-day drop in oil prices in years and boosted stock markets to all-time highs.

Dr Amrita Sen, founder of the Energy Aspects think-tank, predicted that oil prices would rise on April 20 when traders returned to their desks having realised they might have been overly optimistic.

“Events over the weekend with Iran firing on merchant vessels and shutting the strait again highlight just how precarious the situation is,” Dr Sen said.

Pressure for a way out of the war has mounted on Mr Trump as his fellow Republicans prepare to defend narrow majorities in Congress in the November midterm elections, with US petrol prices high, inflation rising and Mr Trump’s own approval ratings down. REUTERS