Good morning. Hopes for a swift end to the Iran war faded as the United States seized an Iranian cargo ship attempting to breach its naval blockade, prompting Tehran to reject further peace talks ahead of the expiration of a two-week ceasefire Wednesday. In focus this week, we try to follow the bouncing barrel.

Trade: Prime Minister Mark Carney says Canada’s close ties to the United States have become “weaknesses” that must be corrected.

Metals: Rio Tinto Group is moving to squeeze as much aluminum as it can from its Canadian smelters to meet demand from U.S. customers as the war in the Middle East lifts global prices.

Politics: Ontario Premier Doug Ford is selling a private government jet days after its purchase was revealed.

Let’s get this strait: The White House said U.S. Vice-President JD Vance is travelling today to Pakistan for high-level meetings with Iran, which said on Sunday it had not agreed to negotiations.

Tehran’s refusal to join in the talks, which were scheduled to take place tomorrow, follows the U.S. capture of an Iranian-flagged cargo ship that had tried to get past the military’s blockade of the Middle Eastern country’s ports.

“We have full custody of their ship, and are seeing what’s on board!” U.S. President Donald Trump wrote yesterday on social media.

The developments marked a sharp turn from just two days prior, when Trump said an end to the war could come “soon,” and Tehran said it would open the Strait of Hormuz, a vital passageway for oil and gas. The announcements sent futures contracts for Brent and U.S. West Texas Intermediate crude to their lowest levels since March 10.

In early trading last night, oil prices shot up again by more than 6 per cent as traders saw tensions reignited in the war, which is now entering its eighth week.

For at least a day, Trump appeared to be on the verge of ending the war against Iran as suddenly as he launched it. But the ceasefire and the opening of the strait could both be reversed in a matter of minutes, Mark MacKinnon wrote on Friday. And he was right.

If no long-term deal is finalized this week, Trump has said, the U.S. will resume its attacks on Iran. On Saturday, after the U.S. refused to end its blockade of Iran’s ports, Tehran again closed the strait – dashing hopes that the millions of barrels of oil and gas that passed through the waterway prior to the war will return to market any time soon.

Even if a broader agreement is pulled out of the fire, major shipping companies have said restoring traffic through the chokepoint to normal levels – about 130 ships a day before the war – will take several weeks.

And an agreement to open the strait doesn’t immediately make it safe to cross. The U.S. Navy warned in an advisory that the mine threats in parts of the waterway were not fully understood.

The price of oil futures has cooled, if only by a little, but companies are still feeling the squeeze of energy costs that have doubled since the beginning of the war.

Air Canada said it is suspending flights to New York’s JFK airport from Toronto and Montreal between June and October because of high fuel prices.

In U.S. retail sales data for March, out tomorrow, investors are expecting to see the effect of US$4-a-gallon gasoline prices on consumer spending.

Inflation split: Elevated oil prices owing to the war in Iran are set to push up Canada’s inflation rate.

Headline Consumer Price Index, the broadest measure that will be reported by Statistics Canada this morning, includes food and energy. Gasoline prices spiked about 20 per cent from a month earlier, likely pushing the measure to about 2.5 per cent from 1.8 per cent in February.

Gas and heating fuels got more expensive, but they make up a relatively small share of overall household spending, limiting their direct impact on broader price increases, economists at Toronto-Dominion Bank wrote on Friday.

Core measures, including CPI-median and CPI-trim, remove large price swings to capture the broader trend across goods and services, and they are expected to hold near 2.3 per cent, little changed from recent months.

These gauges are closely watched by the Bank of Canada because they reflect underlying inflation, which had been easing before the recent rise in energy costs. Market watchers expect the central bank to hold its trend-setting lending rate at its April 29 decision and through the rest of 2026.

The hot seat: Kevin Warsh, the U.S. President’s pick to lead the Federal Reserve, appears before a Senate confirmation hearing tomorrow.

Warsh would inherit the job at a peculiar time for the Federal Reserve. Trump has resurfaced threats to fire Jerome Powell even as the Fed chair nears the official end of his term. Powell has said he would stay on in the role if his replacement is not confirmed by May 15.

Trump ramped up his attacks on Powell, whom he nominated in his first term, since his return to the Oval Office. Lowering interest rates would be one way to boost the U.S. economy, which is facing worries about higher inflation largely owing to the Iran war. Since the U.S. and Israel launched their February attacks, markets have moved from pricing in two rate cuts by the end of the year to none.