- Oil prices rose over 2%, with Brent crude surpassing $85 a barrel for the first time in a month
- Trump announced plans to charge ships 20% fees for using the Strait of Hormuz and reinstate a naval blockade
- US Central Command set enforcement of the Iranian port blockade to begin Tuesday afternoon
Oil prices climbed more than 2% on Tuesday, pushing Brent crude above $85 a barrel for the first time in a month, after U.S. President Donald Trump announced plans to impose shipping fees on vessels using the Strait of Hormuz and reinstate a naval blockade of Iranian ports.
Brent crude futures for September delivery rose as much as 2.8% before trading 2.14% higher at $85.11 a barrel. U.S. West Texas Intermediate crude for August delivery gained 2.27% to $79.91 a barrel, extending Monday's rally of nearly 10%.
The latest measures have renewed concerns about crude supplies from the Persian Gulf, with investors assessing the impact of tighter restrictions on one of the world's most important oil shipping routes.
Trump said the United States would charge ships transiting the Strait of Hormuz "at the rate of 20% on all cargo shipped", describing the U.S. as the "guardian" of the strategic waterway. In a post on Truth Social, he also said Washington would reinstate its blockade of Iranian ports near the strait.
The Joint Maritime Information Center and U.S. Central Command said enforcement of the blockade of Iranian ports and coastal areas would begin at 4 p.m. New York time on Tuesday.
Trump also said countries benefiting from security in the strait, including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait, would reimburse the United States for protecting shipping through the waterway.
Conflict Escalates
The renewed restrictions come as U.S. forces launched a third consecutive night of strikes on Iran, raising concerns that the conflict could continue for several more days.
Iran's army targeted U.S. assets in Kuwait with drones and struck "a hostile vessel" with cruise missiles, the semi-official Fars news agency reported, citing an army statement. Separately, the UAE said two of its tankers were attacked in Omani waters while transiting the southern route of the Strait of Hormuz.
Earlier on Monday, Tehran said its agreement with Washington had "undoubtedly entered a crisis phase" and that it would not comply with its terms while the U.S. continued to violate its commitments.
Iranian Foreign Minister Abbas Araghchi criticised Trump's proposal on X.
"Iran has always been the GUARDIAN of the Strait and will remain so FOREVER," Araghchi wrote. "20% is of course too much. We will be fair."
Oil has now recovered to its highest level in almost a month after losing about 30% during the second quarter. Iran exported at least 57 million barrels of crude during the period between two U.S. naval blockades, underscoring the importance of the renewed restrictions for global oil supplies.
Before the U.S. and Israel launched strikes on Iran on Feb. 28, about one-fifth of global oil supplies passed through the Strait of Hormuz. Shipping volumes dropped after Iran began targeting vessels in early March but had started recovering following an interim agreement between Washington and Tehran.
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