Oil prices climbed on Tuesday as renewed United States-Iran tensions raised concerns about crude shipments through the Strait of Hormuz.
Brent crude rose 3.47% to US$86.19 per barrel on July 14, its highest level since mid-June. United States West Texas Intermediate crude was trading at US$80.54 per barrel at 9:18 a.m. EDT, up US$2.40, or 3.07%, from the previous close of US$78.14.
The market increase followed United States President Donald Trump’s decision to reinstate a blockade targeting Iranian shipping. He also proposed charging other commercial cargo moving through the waterway an amount equal to 20% of its value.
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“The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran. We are reinstating THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait,” Trump wrote on Truth Social on Monday.
The blockade is intended to restrict Iran’s oil exports and the movement of goods through its ports. It was reinstated after Iran declared the strait closed and renewed attacks against commercial vessels and United States interests in the Gulf. Trump said Washington would provide security for ships permitted to use the route and should be compensated for the military resources required.
“The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” he wrote.
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Trump did not explain when the proposed payment would begin. He also did not state how cargo would be valued, how the charge would be collected, or which United States agency would administer it.
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and international markets. About one-fifth of the world’s oil supply moved through the route before the current disruption, making it a critical chokepoint for global energy trade.
