President Donald Trump ordered the U.S. military to blockade the Strait of Hormuz, after marathon talks with Iran wrapped up on Sunday with no deal to end the war.
In a social media post, Trump said he also told the Navy to "seek and interdict every vessel in International Waters that has paid a toll to Iran."
It came after U.S. Vice President JD Vance announced the failed result in Pakistan's capital, where the talks were held.
"We've had a number of substantive discussions with the Iranians, that's the good news. The bad news is that we have not reached an agreement."
Both sides blamed each other for the failed negotiations.
Vance said Iran chose not to accept American terms, including on nuclear arms.
"The simple question is, do we see a fundamental commitment of will for the Iranians not to develop a nuclear weapon, not just now, not just two years from now, but for the long term? We haven't seen that yet, we hope that we will."
The talks in Islamabad came after a ceasefire was agreed earlier in the week.
They were the first direct U.S.-Iranian meeting in over a decade and the highest-level since the 1979 Islamic Revolution.
Iran's foreign ministry spokesperson Esmaeil Baghaei said the two sides reached an understanding on some issues but remained far apart on a few key matters.
However, he told Iranian media that diplomacy would continue.
He described an atmosphere of mistrust and said it was "natural" that an agreement could not be reached in a single session.
Pakistan's Foreign Minister Ishaq Dar urged the two sides to uphold the two-week truce.
He said his country would continue to facilitate engagement, to try and end the fighting that has killed thousands and sent global oil prices soaring since it began over six weeks ago.
During the talks that started on Saturday, three supertankers carrying oil, along with some commercial vessels, passed through the Strait of Hormuz, shipping data showed.
They appear to be the first oil tankers to exit the Gulf since the ceasefire deal.
Hundreds of vessels are still stuck there.
