Negotiations collapsed, and the Strait of Hormuz is closed! The US launches a blockade order in the Gulf of Hormuz. Brent oil breaks through the $103 barrier and European natural gas skyrockets by 18%.

As the United States and Iran failed to reach an agreement following marathon negotiations in Pakistan, the US immediately announced a comprehensive blockade of the Strait of Hormuz, causing a severe impact on the global energy supply chain. As a result, the prices of oil and natural gas skyrocketed. In early Asian trading on Monday, the international oil benchmark Brent price surged over 8%, breaking through the $103 per barrel mark. European natural gas futures prices even soared vertically by 18%, as market fears of disruption in Middle East supplies grew. It is understood that both sides have confirmed the breakdown of negotiations, dealing a major blow to the fragile ceasefire agreement reached just last week. According to Iran's semi-official Tasnim news agency, Iran stated that the demands made by the US were "too harsh". US Vice President JD Vance stated that the core goal of the US was to get Iran to commit to not seeking nuclear weapons, but ultimately failed to do so. According to the latest statement from US Central Command, the US military will officially begin the blockade of the Strait of Hormuz at 10am Eastern Time on Monday. The statement said that a blockade would be imposed on all maritime traffic entering and exiting Iranian ports, applying to vessels of all countries, while explicitly stating that it would not hinder vessels passing through the strait to and from non-Iranian ports. This move signifies a significant escalation in regional tensions since the joint US-Israeli military strike on Iran at the end of February. The six-week conflict prior to this had already led to the actual closure of this crucial waterway that carries about 20% of global liquefied natural gas trade. Although there was a brief increase in tanker traffic last weekend, with the breakdown of talks in Islamabad, two ships attempting to cross the strait were forced to turn back. Since the US-Israeli military strike on Iran, European natural gas prices have risen by over 50%. Although this price has fallen by about one-third from the intraday high set on March 19 when Iran attacked Qatar's liquefied natural gas facilities, the new blockade will undoubtedly reignite supply concerns in the market. Although the majority of Middle Eastern LNG exports go to Asian markets, the ongoing closure of the Strait of Hormuz is forcing European and Asian buyers to compete fiercely in the same limited spot market. Shipping of liquefied natural gas through the strait has been interrupted for over a month, leaving a shortfall in about 20% of global LNG supplies. As Europe enters a new gas storage cycle, any disruption on the supply side could trigger drastic price fluctuations. In the oil market, global refiners and traders are engaged in fierce competition for immediately available spot crude oil cargoes. Analysts warn that the sustained high energy prices will exacerbate global inflation pressures and further weigh down on already weak economic growth prospects. Mona Yacoubian, Director of the Middle East Program at the US Center for Strategic and International Studies, has raised doubts about the feasibility of the US blockade plan. She pointed out, "This appears to be a very ambitious move, but it does not address the fundamental issue of interrupting the waterway. Based on past experiences, Iran is unlikely to back down and is likely to take retaliatory measures." Yacoubian specifically warned that if Iran feels its oil exports are threatened, they are likely to drive the Houthi rebels in Yemen to launch attacks at the southern entrance of the Mandeb Strait in the Red Sea, causing a real crisis in global shipping. In a statement, US President Trump showed a tough stance, stating that if the blockade faces resistance, the US will retaliate. "Any Iranians who fire at American or peaceful ships will be bombed to hell!" It was also reported that Saudi Arabia announced last Sunday that its East-West crude oil pipeline across the country and the Manifa oil field have fully restored their transportation capacity, but this positive development did not fully offset the premium impact of the geopolitical risks in the Strait of Hormuz.