Iran Seizes Two Ships, Halts Strait of Hormuz Traffic

On Wednesday, Iran’s Islamic Revolutionary Guard Corps fired on three ships and took control of two international cargo vessels, moving the captured ships into Iranian ports. The actions brought traffic through the Strait of Hormuz to near standstill.

Iranian state media reported the IRGC seized the vessels and was steering them into Iranian waters. U.S. officials characterized the detained ships as international and judged the seizures did not breach a ceasefire that had been extended a day earlier.

The Strait of Hormuz is a narrow shipping lane through which about 20% of the world’s traded oil normally passes. Shipping firms and port authorities reported that nearly all exports through the route have been halted.

Brent crude rose above $100 a barrel after the attacks and is roughly 35% higher than before the war. Retail gasoline prices have increased in several markets and businesses face higher shipping costs. The European Union’s energy commissioner, Dan Jørgensen, estimated Europe is losing about 500 million euros a day because of the disruption.

Stock indexes largely held steady even as energy markets tightened. Shipping companies and insurers are weighing reroutes, armed escorts and higher premiums as carriers avoid the strait, moves that could raise freight rates and add costs to global trade.

The clashes followed a U.S. naval blockade of Iranian ports intended to pressure Tehran. White House press secretary Karoline Leavitt called the blockade ‘massively effective’ and stated the administration expects Iran to hand over enriched uranium recovered after last year’s strikes on nuclear sites, an operation the U.S. described as Operation Midnight Hammer.

Iranian officials blamed the blockade and what they described as Israeli attacks. Mohammad Bagher Ghalibaf, Iran’s chief negotiator with the United States, wrote on social media that it is ‘not possible’ for the strait to reopen because of ‘blatant violations of the ceasefire.’ President Masoud Pezeshkian wrote that Iran still seeks talks but that ‘breach of commitments, blockade and threats are main obstacles to genuine negotiations.’

Negotiators had been expected to meet in Pakistan this week, but talks had not started as of Wednesday. U.S. officials stated they are awaiting a response from Tehran on the status of negotiations. Former President Donald Trump told an interviewer there is ‘no time pressure’ on the ceasefire or talks and that the blockade has been a stronger deterrent for Iranian leaders than airstrikes.