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The Monday deadline set by US President Donald Trump for a naval blockade of Iranian ports has passed.
Trump announced a blockade of the strategic Strait of Hormuz after weekend peace talks with Tehran ended without an agreement.
The US military announced Sunday it will begin blockading all Iranian Gulf ports on Monday at 1400 GMT, but will allow ships not coming or going to Iran to pass through the strait.
Meanwhile, the head of the UN maritime agency said no country had a legal right to block shipping in the Strait of Hormuz, a trade passage paralysed by the US-Iran war.
The International Maritime Organisation’s Secretary General Arsenio Dominguez addressed a news conference as access to the strait remained blocked six weeks after the war erupted with US and Israeli strikes against Iran.
The United States had threatened to begin a blockade on Monday of Iranian ports in and around the strait, which Tehran’s forces have been controlling access to since after the war broke out on February 28.
“In accordance with international law, no country has the right to prohibit the right of innocent passage or the freedom of navigation through international straits that are used for international transit,” Dominguez said.
Iranian authorities have been allowing a trickle of vetted vessels to pass the strait through a route close to their coast and, in some cases, have reportedly levied a payment to let vessels through.
“This principle of introducing a toll on an international strait for international navigation is against the international law of the sea and the customary law,” Dominguez said.
“It will create a very dangerous precedent.”
The US vow to blockade Iranian ports, meanwhile, “doesn’t make it any easier”, he added.
“De-escalation is what is going to start helping us to address the crisis and to bring shipping back to the way that we used to operate.”
He predicted that the extra impact of a US blockade on shipping would be negligible, however.
“With the very small number of ships that have managed to transit, an additional blockade is not going to exacerbate the situation in a level that it could be perceived.”
Wall Street stocks retreated early on Monday after weekend US-Iran talks failed to produce an accord while Washington moved ahead with a naval blockade, sending oil prices higher.
Oil prices surged back above $100 a barrel as benchmark Brent North Sea Crude up 7.0 per cent at $101.82 a barrel. West Texas Intermediate jumped 7.2 per cent at $103.56 a barrel.
About 15 minutes into trading, the Dow Jones Industrial Average was down 0.8 per cent at 47,546.19.
The broad-based S&P 500 declined 0.3 per cent to 6,794.02, while the tech-rich Nasdaq Composite Index also shed 0.3 per cent to 22,826.38.
“Investors look at this and probably hoped for a better outcome, or at least ongoing talks, which seem to have ended abruptly,” said Art Hogan of B. Riley Wealth Management.
“Therefore, the markets are going to de-risk and reprice lower.”
