World weighs Mideast ceasefire after US seizes Iranian cargo ship

WASHINGTON/CAIRO - Concerns mounted on Monday that a ceasefire between the United States and Iran could be unraveling after Washington said it had seized an Iranian cargo ship that attempted to break a maritime blockade, prompting vows of retaliation from Tehran.

Efforts to establish a more durable peace in the region also appeared increasingly uncertain, as Iran said it would not take part in a second round of negotiations that the United States had hoped to begin before the ceasefire expires on Tuesday.

The United States has maintained a blockade on Iranian ports, while Iran has alternately lifted and reimposed restrictions on maritime traffic through the Strait of Hormuz, a critical waterway that typically carries about one-fifth of global oil supplies.

The U.S. military said on Sunday that it fired on an Iranian-flagged cargo vessel as it headed toward the port of Bandar Abbas. “We have full custody of their ship and are seeing what’s on board,” President Donald Trump wrote on social media.

Iran’s military said the vessel had been traveling from China. A military spokesperson, quoted by state media, warned that Iranian armed forces would “soon respond and retaliate” against what it described as U.S. “armed piracy.”

Oil prices surged and global stock markets fluctuated as traders weighed the risk of continued disruption to shipping routes in the Gulf.

IRAN REJECTS TALKS

Iranian state media reported that Tehran had rejected new peace negotiations, citing the ongoing blockade, hostile rhetoric, and shifting U.S. positions, which it described as “excessive demands.”

“One cannot restrict Iran’s oil exports while expecting free security for others,” Iranian First Vice President Mohammadreza Aref wrote on social media. “The choice is clear: either a free oil market for all, or the risk of significant costs for everyone.”

Trump has repeatedly warned Iran of severe consequences if it rejects U.S. terms, including threats targeting key infrastructure. Iran, in turn, has said it would respond to any strikes on civilian facilities by targeting power stations and desalination plants in Gulf Arab states.

UNCERTAIN PATH TO TALKS

Trump said U.S. envoys would arrive in Islamabad on Monday evening, ahead of the scheduled end of the two-week ceasefire. However, confusion persisted over the composition of the delegation.

A White House official told Reuters the delegation would be led by Vice President JD Vance, alongside envoy Steve Witkoff and adviser Jared Kushner, though Trump later suggested in media interviews that Vance would not attend.

Pakistan, acting as a key mediator, appeared to be preparing for the talks. Two U.S. C-17 military transport aircraft landed at a Pakistani air base on Sunday carrying security equipment and vehicles, according to local security sources.

Authorities in Islamabad tightened security measures, suspending public transport and restricting heavy vehicles. Barbed wire was installed near the Serena Hotel, the previous venue for talks, and guests were asked to vacate the premises.

WIDER REGIONAL IMPACT

Now in its eighth week, the conflict has severely disrupted global energy markets, with oil prices rising sharply amid reduced flows through the Strait of Hormuz.

Thousands of people have been killed in U.S.-Israeli strikes on Iran and an Israeli ground operation in Lebanon that has unfolded alongside the broader conflict since it began on February 28. Iran has responded with missile and drone attacks targeting Israel and nearby countries hosting U.S. forces.

Iranian parliament speaker Mohammad Baqer Qalibaf, who has led Tehran’s negotiating team, said earlier that while some progress had been made, major disagreements remain over nuclear issues and maritime security in the Strait of Hormuz.

European allies, often criticized by Trump for their limited involvement, have expressed concern that Washington is pushing for a rapid agreement that could require lengthy technical follow-up negotiations. -Reporting Reuters bureaus; Writing by Andy Sullivan; Editing by Lincoln Feast./Reuters