Global oil prices could come under fresh pressure after Iran announced the closure of the Strait of Hormuz, a major shipping route for crude oil exports, raising concerns about possible increases in fuel costs across several countries.

Iran on Saturday declared the closure of the strategic waterway, accusing Israel of violating a ceasefire agreement through continued deadly attacks in southern Lebanon.

The Islamic Revolutionary Guard Corps Navy warned ships against entering the strait, saying the safety of vessels could not be guaranteed.

The move comes despite Iran's earlier commitment to reopen the route under an interim peace agreement reached this week.

Iran's top joint military command described the closure as the "first step" in response to what it called violations of commitments by the United States and Israel, according to the country's semi-official Mehr news agency.

However, the United States indicated that commercial activities in the area were continuing. In a statement posted on X, U.S. Central Command said 55 merchant ships passed through the strait on Saturday, transporting "moving large amounts of cargo and more than 17 million barrels of oil to global markets."

The command added that U.S. forces "remain present and vigilant to ensure all aspects of the agreement with Iran are adhered to, obeyed, and in full force and effect."

Tensions have continued to rise despite the ceasefire arrangement brokered earlier this week. Both Tehran and Washington have expressed dissatisfaction with Israel's military actions in Lebanon, arguing that the agreement required hostilities to cease across all fronts.

Iran has repeatedly warned that Israeli military operations in Lebanon would be viewed as a breach of the deal, even though Israel was not a direct signatory to the agreement.

The latest escalation followed Israeli air raids early Saturday that reportedly killed at least 16 people, including two children. The attacks came a day after the United States announced that Israel and Hezbollah had agreed to a renewed ceasefire at the request of President Donald Trump.

According to Lebanon's National News Agency, several towns in southern Lebanon were targeted. An airstrike on Arabsalim reportedly left three people dead, while a drone strike on Deir al-Zahrani killed one person. Authorities also reported that at least seven people remained trapped beneath collapsed structures. Lebanon's army said one of its soldiers was killed between Kfar Rumman and Nabatieh.

The attacks followed an earlier wave of Israeli strikes on Friday that killed 83 people, according to Lebanon's Ministry of Health.

Responding to the accusations, the Israel Defense Forces said Hezbollah had violated the ceasefire by launching more than 50 projectiles at Israeli troops operating in southern Lebanon.

The Israeli military said it targeted Hezbollah positions in retaliation, adding, "The IDF remains committed to the ceasefire agreement."

Hezbollah rejected the allegation, insisting it had "adhered to the ceasefire since Friday evening," while accusing Israel of spreading false claims to justify further attacks and "sabotage the agreement" reached between Iran and the United States.

The renewed violence has cast uncertainty over ongoing U.S.-Iran peace efforts.

President Trump's special envoy, Steve Witkoff, and his son-in-law, Jared Kushner, were in Switzerland on Saturday working on what Vice President JD Vance described as the technical aspects of the negotiations.

Speaking before Iran announced the closure of the Strait of Hormuz, Vance said he expected to join the discussions within days. He added that recent conversations with Witkoff and Kushner suggested that "things are going well."

Meanwhile, Pakistan's Ministry of Foreign Affairs said technical-level talks involving U.S. and Iranian representatives, alongside mediators from Qatar and Pakistan, would take place on Sunday.

Iranian Foreign Ministry spokesman Esmail Baghaei said the delegation's visit was a "mission to demand the fulfillment of the other side's obligations," adding that "negotiations for a final agreement" would begin once those commitments were honoured.

Baghaei said Parliament Speaker Mohammad Bagher Ghalibaf and Foreign Minister Abbas Araghchi would head the Iranian delegation.

The United States and Iran had initially planned to begin a 60-day negotiation process in Switzerland on Friday aimed at securing a comprehensive agreement, including unresolved issues surrounding Iran's nuclear programme. Those talks were later postponed.

Tribune Online reports that oil prices fell last Sunday after United States President Donald Trump announced that Washington and Tehran had reached a peace agreement, raising hopes for an end to disruptions affecting global crude supply.

Brent crude dropped 3.9 per cent to about $84 per barrel, while U.S. crude declined 4.8 per cent to around $81 per barrel.

(NBC News)