Iran Suspends U.S. Nuclear Talks, Threatens Hormuz Closure

Iran suspended nuclear negotiations with the United States on Monday and said it could close the Strait of Hormuz and enable Houthi action in the Bab el-Mandeb, moves that pushed oil prices toward $100 a barrel. Tehran tied any resumption of talks to an immediate halt to Israeli military operations in Lebanon and Gaza.

Mohammad Bagher Ghalibaf, Iran’s lead negotiator, cited a U.S. blockade of Iranian ports and recent Israeli strikes in Lebanon as evidence the ceasefire framework was not being respected. Iranian officials said Tehran will not exchange further messages with U.S. intermediaries until Israeli forces withdraw from occupied areas of Lebanon and stop strikes in Gaza.

Markets reacted quickly. West Texas Intermediate futures rose about 8% to $96.14, while Brent crude traded near $100. Traders priced in the possibility that Iran could disrupt tanker traffic through the Strait of Hormuz, the narrow waterway that handled about 20% of global seaborne oil in 2024.

Iran also signaled it could permit or support Houthi operations in the Bab el-Mandeb, the southern gateway to the Red Sea. Energy traders reported a widening gap between futures contracts and physical crude availability as concerns increased over actual cargo delivery. Some charter rates for tankers rose on worries about longer routings and higher insurance costs if chokepoints were closed or contested.

Supply through the Strait of Hormuz has been constrained since late February, and Gulf producers flagged tighter inventories earlier this spring. Analysts said a simultaneous disruption at Hormuz and Bab el-Mandeb would further reduce available cargoes and tighten the physical market.

Nine days earlier, President Donald Trump had said a broader Iran deal was “largely negotiated” and would be announced shortly; Monday’s announcement reversed the trajectory of risk pricing that had eased after that statement.

Podcast host Mario Nawfal wrote: “Now is the perfect test to see who calls the shots: Netanyahu or Trump. My bet is on the latter.”

Market participants said they will monitor shipping traffic, official statements from Tehran and Washington, and any Houthi movement toward the Red Sea for signs of further disruption. Traders described the price action as a return to wartime risk pricing rather than a single-day spike.