Trump reinstates Strait of Hormuz blockade as oil surges 7.8%

The US president declared the Iran ceasefire "over" and ordered a naval blockade of the world's most critical oil chokepoint, sending Brent crude above $81 a barrel.

President Donald Trump reinstated a US blockade of the Strait of Hormuz on Monday and said the US would charge ships a 20% toll on cargo value for safe passage, sending Brent crude up 7.8% to $81.92 a barrel.

"POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service," Iran's Foreign Minister Abbas Araghchi wrote on X, before adding that "20% is of course too much."

The US military struck dozens of sites in Iran on Monday, including air defense systems, radar sites, missile and drone equipment, and small boats, in response to an Iranian attack on a container ship. The US used drone ships for the first time to hit an Iranian ship maintenance facility and submarine, according to the US military. Iran reported attacks in Hormozgan, Khuzestan and Markazi provinces, with at least two people killed, state-run IRNA news agency reported.

The Strait of Hormuz handles about a fifth of the world's oil and gas trade, and the escalation threatens to reignite a conflict that had briefly eased after an interim peace deal last month. Trump declared that deal "over" last week and ended waivers allowing Iran to sell crude oil on the open market. Mediators including Pakistan, Qatar and Egypt continue efforts to reach a final agreement, with the 60-day negotiation period nearly halfway through.

The policy reversal marked a sharp departure from the US position as recently as late June. Secretary of State Marco Rubio told reporters in Bahrain on June 25 that there was "zero support among the Gulf countries for any sort of toll or fees" for passage through international waterways. The International Maritime Organization said there was "no legal basis through which to introduce mandatory tolls simply to transit through a strait."

Regional Spillover Intensifies

The conflict is drawing in US-allied Arab states. Kuwait's Foreign Ministry said its consulate in Iraq had been attacked and condemned Iran and "its factions and militias loyal to it in Iraq" for striking "several border points" and a maritime oil drilling platform belonging to Kuwait Petroleum Corp. Jordan's military said it shot down four Iranian missiles with no casualties or damage. Missile alert sirens sounded three times Monday in Bahrain, home to the US Navy's 5th Fleet.

The last time the US imposed a blockade on Iran in the strait was in mid-April, before the interim peace deal lifted it. During that period, Brent crude briefly touched nearly $120 a barrel at the height of the war. The current $81.92 level remains well below that peak but represents a sharp reversal from the post-ceasefire decline.

Iran's Foreign Ministry spokesperson Esmail Baghaei blamed Washington for the regional chaos and said Iran would not agree to visits by the International Atomic Energy Agency to nuclear sites the US bombed in 2025, where Tehran's stockpile of highly enriched uranium is believed to be entombed. Iran asserts it has the right to manage traffic through the strait under the interim peace deal, a claim the US has disputed.

This article is for informational purposes only and does not constitute investment advice.