Markets Rally on US-Iran Diplomacy Hopes Despite Blockade

Global stock markets rallied and oil prices eased on Tuesday amid renewed optimism for diplomatic progress in the escalating conflict between the United States and Iran, even as a U.S. naval blockade of Iranian ports took effect. The weekend peace talks in Islamabad, Pakistan, concluded without an agreement on Sunday, prolonging a war that began on February 28 and has disrupted energy supplies through the Strait of Hormuz, a vital chokepoint for about one-fifth of the world's oil and gas.

The negotiations, the highest-level direct discussions between Washington and Tehran since the 1979 Iranian Revolution, broke down over core issues. U.S. Vice President JD Vance, who led the American delegation, accused Iran of refusing to abandon its nuclear program. Iran's Foreign Minister Abbas Araghchi countered that the talks had come "inches away" from a deal but faltered due to what he described as American "maximalism, shifting goalposts, and blockade." Araghchi made the remarks during a call with his Saudi counterpart, Prince Faisal bin Farhan, according to Iran's foreign ministry.

U.S. President Donald Trump announced the blockade late Sunday, stating it would begin Monday at 1400 GMT...