Oil tops $80 as Trump revives Iran blockade

Oil prices climbed above $80 per barrel on Monday after renewed military confrontation between the United States and Iran heightened concerns over shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.

The latest escalation came as United States President Donald Trump announced plans to impose a 20 per cent charge on cargo passing through the Strait of Hormuz, saying Washington should be reimbursed for securing the strategic waterway. He also declared that the United States was “reinstating” a naval blockade on Iran, further raising fears over global crude oil supplies and energy markets.

According to oilprice.com, Brent crude rose from about $76 to above $80 per barrel following a fresh exchange of missile and drone attacks between the two countries, with both sides accusing each other of escalating hostilities around the strategic shipping lane.

In a post on his Truth Social platform, Trump insisted the Strait of Hormuz would remain open regardless of Iran’s actions.

“The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran. We are reinstating THE IRANIAN BLOCKADE. The U.S.A will be reimbursed, at the rate of 20 per cent 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 said.

The US president said implementation of the policy would begin immediately but did not explain how the proposed levy would be collected or enforced.

Earlier, during an interview on Fox News’ Fox & Friends, Trump said Washington could assume responsibility for safeguarding the vital maritime corridor.

“We’re going to keep the strait, and we’ll probably run it. We’ll become the guardian of the strait. Maybe we’ll call it the guardian angel of the strait. And we should be reimbursed for that. The other nations are very wealthy. They’re on our side, and we can’t be expected to do that for nothing,” he said.

Trump also accused Iran of repeatedly violating agreements reached with Washington. “We had a deal. It was a done deal, and then they broke it. They always break it. We’ve had 10 deals with these people, and so we’re just going to hit them very hard,” he added.

Iran swiftly rejected the proposal, insisting it had always been the guardian of the Strait of Hormuz and that the United States had no legal authority to impose charges on vessels using an international shipping lane.

In a post on X, Iranian Foreign Minister Abbas Araqchi said Iran would remain the guardian of the strategic waterway “forever” and described Trump’s proposal to impose a 20 per cent charge on cargoes passing through the strait as excessive.

Iran’s Revolutionary Guards also warned that the only way to restore normal commercial shipping through the strait was for Washington to end its military operations in the Gulf, cautioning that “continued interference could lead to greater incidents in the global oil and gas sector.”

According to Reuters, the US Navy-led Joint Maritime Information Centre said the United States military would begin enforcing a maritime blockade on Iran from 4 p.m. Washington time on Tuesday.

An advisory said the blockade would cover all Iranian ports, oil terminals and coastal areas and apply to all vessel traffic regardless of flag. It added that vessels suspected of entering or leaving the blockaded area without authorisation could be intercepted, diverted or captured, while force could be used against non-compliant vessels.

The advisory, however, stated that neutral transit through the Strait of Hormuz to or from non-Iranian destinations would not be impeded.

Meanwhile, US Central Command said it struck an Iranian submarine and a ship maintenance facility overnight on Monday in response to what it described as Iranian attacks on commercial vessels in the strait.

Iran said it had targeted US military assets across the Gulf, including bases in Jordan, Bahrain and Kuwait, as well as radar installations in Oman. Bahrain accused Tehran of targeting civilians.

Ship-tracking platform MarineTraffic indicated that while a limited number of vessels were still moving through the Strait of Hormuz, overall traffic remained restricted.

The renewed confrontation has cast fresh doubt over an interim agreement reached last month under which both countries agreed to reopen the strait temporarily and suspend hostilities for 60 days while broader negotiations continued.

The Strait of Hormuz remains the principal export route for crude oil and liquefied natural gas from Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates, and Iran, with roughly one-fifth of global oil consumption passing through the narrow waterway each day.

The developments have also raised questions over the legality of imposing charges on vessels using the strategic route. Reuters reported that under the United Nations Convention on the Law of the Sea, ships have the right of unimpeded transit passage through international straits, including the Strait of Hormuz, and coastal states cannot impose charges solely for passage.

Although Iran has argued that it is not bound by some provisions of the convention, the United States disputes Tehran’s authority to levy tolls on vessels using the strait. Trump’s proposed cargo charge has yet to be implemented, and it remains unclear whether US allies, international shipping firms or major oil exporters would comply with the proposed arrangement.