Iran Stalls Departure as Ceasefire Expires in 24 Hours, Oil Markets Brace for Hormuz Closure

Iran’s negotiating team has delayed departure for critical peace talks in Islamabad hours after US Vice President JD Vance arrived in Pakistan, with the two-week ceasefire set to expire Wednesday evening Washington time and no agreement in sight.

The Iranian delegation, expected to be led by Parliament Speaker Mohammad Bagher Ghalibaf, has not boarded flights to Pakistan as of Tuesday afternoon, according to Jerusalem Post citing Iranian state television. The delay follows intense pressure from Iran’s Islamic Revolutionary Guard Corps (IRGC) on negotiators to refuse talks unless the US lifts its naval blockade of Iranian ports. Vance, leading a delegation that includes envoys Steve Witkoff and Jared Kushner, departed Washington Monday night for what was billed as a final attempt to avert the renewal of a conflict that has already disrupted 13 million barrels per day of crude oil, condensates, and natural gas through the Strait of Hormuz.

Diplomatic Breakdown Hours Before Deadline

The first round of talks in Islamabad lasted 21 hours and ended 12 April without agreement, per Al Jazeera. Core disagreements remain on uranium enrichment timelines, sanctions relief, and control of the Strait of Hormuz. The US has proposed a 20-year halt to uranium enrichment; Iran’s most recent counter offered 10 years at weapons-grade levels plus another decade at sub-weapons-grade enrichment, according to CNN. The US rejected Iran’s initial five-year proposal outright.

Trump’s public social media posts claiming Iranian concessions on issues not yet agreed complicated the diplomatic picture. A person familiar with the talks told CNN that “the Iranians didn’t appreciate POTUS negotiating through social media and making it appear as if they had signed off on issues they hadn’t yet agreed to, and ones that aren’t popular with their people back home.” The comments reflect a broader pattern of US impatience colliding with Tehran’s domestic political constraints, where hardliners view any concession on enrichment or Hormuz as capitulation.

Naval Seizure Escalates Pre-Talk Tensions

The US Navy seized an Iranian-flagged cargo vessel in the Gulf of Oman on 20 April, one day before the scheduled talks, attempting to enforce the blockade Trump imposed after the first round collapsed. CNBC reported the ship was attempting to bypass the blockade. Iran views the blockade itself as a breach of the ceasefire terms and has used the seizure as evidence of US bad faith.

Pakistan’s army chief traveled to Tehran last week carrying new US proposals in a last-ditch mediation effort. Egypt and Turkey have also acted as intermediaries. Yet Iran’s public posture has hardened in recent days. Ghalibaf stated on 19 April that “there will be no retreat in the field of diplomacy,” according to Fortune, while simultaneously accusing the US of undermining trust. Trump threatened to strike Iranian bridges and power plants if no deal is reached, a threat Al Jazeera reported has been received in Tehran as proof the US seeks regime change, not negotiation.

Oil Markets Swing on Hormuz Signals

Brent crude fell 9% to $90.38 per barrel on 18 April after Iran announced it would reopen the Strait of Hormuz, Al Jazeera reported. The rally proved short-lived. Iran reversed its position the following day, and prices rebounded as traders priced in the risk of a renewed blockade. The strait carries roughly 20% of global crude oil and liquefied natural gas exports. Any prolonged closure would reignite inflationary pressures already elevated by post-pandemic supply shocks and European energy shortages.

Lloyd Chan, senior currency analyst at MUFG Global Markets Research, told CNBC that “any escalation, particularly military action around Hormuz, could trigger a renewed spike in oil prices and a broad risk-off move.” Asian economies dependent on Middle Eastern crude face acute vulnerability. Japan, South Korea, and China import the majority of their energy through Hormuz, and alternative routing via pipelines or longer tanker routes would add weeks to delivery and billions in costs.

IRGC Pressure Complicates Iranian Calculus

Internal Iranian politics have emerged as a critical variable. The IRGC, which controls much of Iran’s economy and security apparatus, has pushed negotiators to reject any deal that does not lift the US blockade first. Axios reported that hardline factions view the talks as a trap designed to extract concessions while maintaining economic pressure. Iran’s cumulative economic losses from the blockade and previous sanctions exceed $500 billion, yet the IRGC’s political influence means moderates within the government have limited room to maneuver.

Ghalibaf’s statement after the first round reflected this tension: “My colleagues on the Iranian delegation raised forward-looking initiatives, but the opposing side ultimately failed to gain the trust of the Iranian delegation,” he said, per CNBC. The phrasing suggested Iran’s team arrived prepared to negotiate but found US demands incompatible with domestic political survival. Trump’s public ultimatums and the naval seizure have only strengthened the IRGC’s argument that Washington seeks capitulation, not compromise.

What to Watch

Whether Iran’s delegation departs Tehran in the next 12 hours will signal whether talks can resume before the ceasefire expires. If the delegation boards flights, expect oil prices to stabilise or dip on renewed negotiation hopes. If Iran refuses to send negotiators, Brent will likely spike above $100 as markets price in a return to hostilities and a prolonged Hormuz closure. Trump’s response to an Iranian no-show—whether he orders the threatened strikes on infrastructure or extends the ceasefire unilaterally—will determine the speed and severity of the market reaction. Asian central banks are preparing for a scenario where energy inflation forces emergency rate hikes, and European leaders are exploring emergency LNG supply agreements with Qatar and the US. The next 48 hours will decide whether diplomacy can avert what would be the largest energy supply disruption in five decades.