STORY: Iran's state news agency on Sunday reported the country had rejected new peace talks with the United States.

The rejection came hours after U.S. President Donald Trump had said he was sending envoys to Pakistan for talks and would strike Iran unless it accepted his terms.

Iran's official news agency wrote, "Iran stated that its absence from the second round of talks stems from what it called Washington's excessive demands, unrealistic expectations, constant shifts in stance, repeated contradictions, and the ongoing naval blockade, which it considers a breach of the ceasefire."

:: File

Trump meanwhile said the U.S. military had taken control of an Iranian-flagged cargo ship by blowing a hole in its engine room. 

He wrote on social media, "We have full custody of the ship, and are seeing what's on board!" 

:: April 18, 2026

The United States has kept a blockade of Iranian ports in place, while Iran has lifted and then reimposed its own blockade of marine traffic through the Strait of Hormuz.

Before the war - almost two months ago - roughly one-fifth of the world's oil supply flowed through the strait.

:: Released February 28, 2026

Thousands of people have been killed since joint U.S.-Israeli strikes on Iran began on February 28. 

Iran responded to the attacks with missiles and drones against its Arab neighbors that host U.S. bases.

The apparent diplomatic setback could set the stage for a renewed surge in oil prices when markets reopen after the weekend.

Now in its eighth week, the war has created the most severe shock to global energy supplies in history, sending oil prices surging because of the de facto closure of the strait.