Markets spooked as US president appears willing to keep up naval blockade and Iran keeps strait of Hormuz all but shut

The global oil price hit $126 a barrel on Thursday, its highest level since 2022, after Donald Trump said the US blockade of Iranian ports could last for months and peace talks remained stalled.

After surging more than 13% in 24 hours, the price of Brent crude futures reached its highest price since the war began on 28 February. Not since Russia’s 2022 invasion of Ukraine has Brent topped $120, with the price then peaking at $139.

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If you’re just joining us, here’s the main news of the day. It is 9.30am in Tehran, 9am in Jerusalem and Beirut, and 2am in Washington DC.

Donald Trump unilaterally said he is extending the ceasefire with Iran at Pakistan’s request while awaiting a “unified proposal” from Tehran, even as the US military maintains its blockade of Iranian ports.

Trump made the announcement as ceasefire talks looked increasingly uncertain with a two-week truce set to expire on Wednesday. Both countries had said they were prepared to resume fighting if no deal is reached.

Trump said he would “extend the ceasefire until such time as [Iran’s] proposal is submitted, and discussions are concluded, one way or the other”.

Trump later claimed in a Truth Social post that Iran is “collapsing financially” and was losing $500m every day that the strait of Hormuz is effectively closed.

Iran has yet to decide whether to join the negotiations in Pakistan, a foreign ministry spokesman said earlier on Tuesday, and will only take part if Tehran believes the discussions would yield results.

A container ship has reported being fired at by an IRGC gunboat, the United Kingdom Maritime Trade Operations said. The incident occurred 15 nautical miles north-east of Oman. The vessel sustained “heavy damage” to its bridge, the master of the ship said. All crew members were reported as safe.

Shares were mixed in Asia as markets waited to see if the US and Iran may resume talks. Brent crude edged higher to $98.51 a barrel, while US benchmark crude fell 0.4% to $89.29 a barrel.

One person was killed and two others wounded in an Israeli drone strike overnight on the outskirts of al-Jbour in Lebanon’s western Bekaa Valley, Lebanese state media reported. Israel and Lebanon agreed to a 10-day ceasefire on Friday.

Since the war started, fighting has killed at least 3,375 people in Iran and more than 2,290 in Lebanon, the Associated Press reported. Additionally, 23 people have died in Israel and more than a dozen in Gulf Arab states. Fifteen Israeli soldiers in Lebanon and 13 US service members throughout the region have been killed.

Iran’s Revolutionary Guards threatened to prevent oil production in the Middle East if the Islamic republic faced attacks launched from its Gulf neighbours’ territory.

This blog is now closed. See our latest full report here: Trump announces extension of Iran ceasefire until ‘discussion concluded’

Iran’s armed forces are ready to deliver an “immediate and decisive response” to any renewed hostile action by its adversaries, Ali Abdollahi, commander of the Khatam al-Anbiya Central Headquarters, was quoted by the Tasnim news agency as having said.

He said Tehran had the upper hand militarily, including in the management of the strait of Hormuz, and would not allow Donald Trump to “create false narratives over the situation on the ground.”

This blog is now closed. See our latest full report here: JD Vance to lead US delegation in Pakistan if Iran agrees to talks

The US has just released some more footage of the encounter with the Iranian flagged vessel, the M/V Touska.

In a post on X, US Central Command said US Marines had departed the amphibious assault ship USS Tripoli by helicopter and rappelled onto the Iranian-flagged vessel.

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UN secretary-general António Guterres has strongly condemned the killing of a French peacekeeper and the wounding of three others in an attack in southern Lebanon, spokesman Stéphane Dujarric said in a statement to the Associated Press.

The UN peacekeeping force came under attack with small-arms fire on Saturday morning, with two of the injured hurt seriously, France’s president and the force known as UNIFIL said.