Oil prices jumped sharply on Monday after US President Donald Trump announced that the United States would reinstate a blockade targeting Iranian shipping in the Strait of Hormuz and introduce a 20% charge on cargo passing through the key waterway.
According to US Central Command (CENTCOM), the blockade is scheduled to begin at 4 p.m. ET on Tuesday, July 14. The military said it will enforce restrictions on vessels traveling to or from Iranian ports and coastal areas.
The announcement immediately shook global energy markets. Brent crude oil, the international benchmark, climbed about 9.5% to above $83 per barrel, while West Texas Intermediate (WTI) rose past $78 per barrel. The sharp rise pushed oil prices to their highest levels in nearly a month, while stock markets declined as investors reacted to growing geopolitical tensions.
President Trump said the Strait of Hormuz would remain open for international shipping but emphasized that the US would block Iranian vessels and ships doing business with Iran. He also declared that the United States would act as the “Guardian of the Strait of Hormuz” and charge a 20% fee on all cargo shipments to cover the cost of providing security in the region.
Speaking earlier on Fox News, Trump argued that the US should not bear the expense of protecting one of the world’s busiest shipping lanes without compensation, especially when many other nations benefit from its security.
However, legal experts have questioned how the US plans to collect the proposed cargo fee. International maritime law generally does not allow countries to impose tolls on international waterways like the Strait of Hormuz, and the legal basis for the proposed charge remains unclear.
CENTCOM also reported that during a previous blockade between April 13 and June 18, US forces redirected more than 140 compliant vessels, disabled nine non-compliant vessels, and allowed over 50 humanitarian aid ships to pass safely.
The latest announcement comes amid escalating tensions in the Middle East. Over the weekend, the US military said it struck around 140 targets. In response, Iranian state media reported that Iran launched attacks targeting US military bases and infrastructure in Gulf nations. Iran’s Revolutionary Guard also said it intercepted two vessels in the Strait of Hormuz for allegedly using an illegal route.
With the Strait of Hormuz handling a significant share of the world’s oil shipments, any disruption to traffic through the waterway has the potential to increase oil prices further and add uncertainty to global energy markets.
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