The United States military announced it would begin a naval blockade of all Iranian ports on Monday at 14:00 GMT, hours after 21 hours of high-stakes diplomatic talks in Islamabad ended without agreement. US Central Command said the blockade would be "enforced impartially against vessels of all nations" entering or departing Iranian ports and coastal areas, including ports on the Arabian Gulf and Gulf of Oman. The announcement sent oil prices surging almost 8 percent, with both major benchmarks — Brent crude and WTI — topping $100 a barrel, while Pakistan's stock exchange shed more than 6,600 points, a fall of nearly 4 percent, in a turbulent session.

The talks, hosted by Pakistan in Islamabad, represented the first direct, high-level face-to-face engagement between the United States and post-revolution Iran, with US Vice President JD Vance leading the American delegation and Iranian parliamentary speaker Mohammad Bagher Ghalibaf heading Tehran's side. Pakistan, which shares a long border with Iran, has close ties with Gulf states, and whose army chief enjoys a warm relationship with President Donald Trump, was uniquely positioned to facilitate the negotiations. The venue — the Serena Hotel, cleared of all guests and secured by over 10,000 personnel — was sealed off to create what officials described as a controlled diplomatic environment. Talks ran through the night in multiple rounds, with drafts exchanged and positions restated, but progress came only in fragments. When Vance emerged, he was candid: "The good news is that we've had substantive discussions. The bad news is that we have not reached an agreement." He said Washington had presented its "final and best offer" and demanded a long-term commitment from Iran to abandon its nuclear weapons programme — a commitment Tehran did not provide.

Iran's interpretation of the breakdown differed sharply. Its ambassador in Islamabad described the talks as "a process, not an event" that had "laid the foundation" for future engagement. Tehran had entered negotiations with conditions: progress on a ceasefire on the Lebanon front, where more than 2,000 people have been killed in an ongoing Israeli campaign, and the unfreezing of Iranian assets locked under years of US sanctions. State-affiliated Iranian media characterised Washington's demands as excessive. Iran's military, in a statement issued through its central command centre Khatam al-Anbiya, declared the planned blockade "illegal" and "an act of piracy," warning that if Iranian ports in the Persian Gulf and Arabian Sea were threatened, "no port in the Persian Gulf and Arabian Sea will be safe."

The blockade announcement drew swift international criticism. China, a major importer of Iranian oil, called on both sides not to reignite the conflict and stressed that freedom of navigation through the Strait of Hormuz — a narrow waterway through which roughly 20 percent of the world's oil passes — was "in the common interest of the international community." Within NATO, Spain's defence minister called the blockade "one more episode in this whole downward spiral," while British Prime Minister Keir Starmer stated plainly that the UK "will not get dragged" into the US-Israel war on Iran and would not join the naval action.

The stakes for global stability are considerable. The Strait of Hormuz has been heavily restricted since the US and Israel began strikes on Iran in late February, with Tehran allowing passage only to vessels from friendly nations such as China. A fragile ceasefire, which entered into force on 8 April, has so far held, but Iran's Revolutionary Guards warned that any military approach to the strait would be treated as a violation of that truce. For Pakistan, which staked significant diplomatic capital on hosting the talks, officials maintained a cautious public posture. "We hope both sides maintain a positive spirit," foreign minister Ishaq Dar said — a carefully neutral statement from a country that now watches the crisis it tried to defuse move toward a potentially more dangerous phase.