Hopes that the two would meet for a second round of negotiations in Pakistan have dissipated, with the Islamic republic targeting three container ships in the waterway and citing Washington's blockade as its reason for keeping it closed.
Investors have spent most of the week upbeat that a breakthrough to end the seven-week conflict will be made soon, while healthy earnings and a resumption of the AI trade has also provided support.
Crude prices jumped as much as four percent in early Asian business after global security monitors and Iran's Revolutionary Guards said Iranian forces had seized two ships and fired on a third in the Strait of Hormuz.
Tehran has said vessels must seek permission to leave or enter the Gulf through the waterway, which in peacetime accounts for around a fifth of the world's oil and gas exports along with other vital commodities.
However, the White House said Donald Trump did not consider the move to be a ceasefire violation because the vessels are not American or Israeli.
Meanwhile, Iran's parliament speaker said the Islamic republic would not reopen the Strait as long as the US naval blockade remained, calling it a "blatant violation" of the two countries' ceasefire.
"A complete ceasefire only has meaning if it is not violated through a naval blockade... Reopening the Strait of Hormuz is not possible amid a blatant violation of the ceasefire," speaker Mohammad Bagher Ghalibaf said on X.
Still, Trump's Press Secretary Karoline Leavitt said he "has not set a firm deadline to receive an Iranian proposal" for talks.
"Ultimately, the timeline will be dictated by the commander in chief," she told journalists.
Oil prices remained elevated, with Brent holding above $100 following a surge Wednesday, though they pared Thursday's initial gains.
Equities fell, though, with Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Taipei, Mumbai, Bangkok and Wellington all down.
But Seoul rose to a new record thanks to a fresh rally in the tech sector that has been the backbone of a surge in the Kospi index this year.
London, Paris and Frankfurt opened on the back foot.
"Whether it's conflict fatigue or confidence that the conflict between the US and Iran will be resolved soon, there is limited evidence that the rise in the oil price dampened bond and equity markets," said National Australia Bank's Skye Masters.
However, she added that the Washington Post had reported a senior Defence Department warned it could take six months to fully clear the Strait of Hormuz of mines and that such an operation would probably not unlikely start before the end of the war.
"It is questionable whether financial markets are correctly pricing the reality that supply constraints will remain an issue for some time," she wrote.
Raphael Olszyna-Marzys, of Bank J. Safra Sarasin, added: "Financial markets are pricing a high likelihood that traffic through the Strait of Hormuz will soon normalise.
"Our game-theory model suggests that a narrow agreement to reopen the strait is in both parties' best interests. This outcome remains our base case. But it also reveals that a misreading of the other party's intentions could lead to a further ratcheting-up of tensions before we get there."
Investors took some heart from strong earnings reports, with South Korean chip titan SK hynix posting a nearly 400 percent jump in net profit that hit a record for January-March thanks to the artificial intelligence boom.
That came after Tesla announced forecast-topping first-quarter profits and Texas Instruments offered a healthy outlook.
Bloomberg said almost 80 percent of the S&P 500 firms that have reported first-quarter earnings had beaten analyst estimates so far.
- Key figures at 0715 GMT -
West Texas Intermediate: UP 1.5 percent at $94.39 a barrel
Brent North Sea Crude: UP 1.5 percent at $103.45 a barrel
Tokyo - Nikkei 225: DOWN 0.8 percent at 59,140.23 (close)
Hong Kong - Hang Seng Index: DOWN 0.9 percent at 25,931.13
Shanghai - Composite: DOWN 0.3 percent at 4,093.25 (close)
London - FTSE 100: DOWN 0.6 percent at 10,418.40
Euro/dollar: UP at $1.1710 from $1.1709 on Wednesday
Pound/dollar: DOWN at $1.3497 from $1.3506
Dollar/yen: DOWN at 159.64 yen from 159.49 yen
Euro/pound: UP at 86.75 pence from 86.70 pence
dan/abs