US and Iran hold Islamabad talks as Hormuz Strait remains disrupted

Friday 10 April 2026 - 17:00

By: Dakir Madiha

US and Iran hold Islamabad talks as Hormuz Strait remains disrupted

Delegations from the United States and Iran are meeting in Islamabad as a fragile two week ceasefire fails to restore normal shipping through the Strait of Hormuz, where more than 800 vessels remain stranded.

The truce, brokered by Pakistani Prime Minister Shehbaz Sharif and announced by Donald Trump, triggered a sharp rally in global markets earlier this week. The Dow Jones Industrial Average jumped about 1,300 points, its strongest daily gain since April 2025, while the S&P 500 and Nasdaq Composite extended a seven session winning streak.

Oil prices dropped sharply following the announcement. West Texas Intermediate fell more than 16% in a single session, its steepest decline since 2020, while Brent crude dropped over 13% to below $95 per barrel. Energy stocks also came under pressure, with Exxon Mobil and Shell recording notable losses.

The initial optimism faded quickly as shipping conditions in the Strait of Hormuz remained largely unchanged. Only a limited number of vessels have passed through the waterway since the ceasefire took effect, far below normal traffic levels. Disruptions intensified after Israeli airstrikes in Lebanon, further complicating efforts to reopen the route.

Oil prices rebounded as supply concerns persisted. The US Energy Information Administration raised its 2026 Brent price forecast to $96 per barrel, citing ongoing disruptions.

Attention is now focused on high level negotiations in Islamabad. US Vice President JD Vance is leading the American delegation, while Mohammad Bagher Ghalibaf heads the Iranian team.

The talks represent the most direct engagement between Washington and Tehran since the Iranian Revolution. Key disagreements remain unresolved, including Iran’s demand to retain control over the strait, recognition of its uranium enrichment program, and the lifting of sanctions.

Trump has rejected any continuation of uranium enrichment, while disputes over Israeli strikes in Lebanon have added further uncertainty to the ceasefire’s durability.

Analysts say early stage ceasefire agreements often face violations and contradictions, underscoring the fragile nature of the current diplomatic process.