Oil Prices Continue to Rise Following Trump's Announcement of Reimposing Blockade on Iranian Ships

SadaNews - The price of Brent crude jumped above $85 a barrel for the first time in a month after U.S. President Donald Trump announced he would reimpose a blockade on Iranian ships passing through the Strait of Hormuz and would demand fees for all other shipments passing through the waterway.

Brent crude rose by as much as 2.8% to $85.57 a barrel, after it had surged by nearly 10% on Monday, while West Texas Intermediate crude traded near $80. European natural gas prices jumped by up to 3.3% to their highest level in over three months.

Trump called for a 20% compensation fee on shipments, translating to about $30 million on fully loaded supertankers, while U.S. forces completed another round of strikes against Iran that could last several more days.

Iranian Foreign Minister Abbas Araghchi mocked Trump's proposal regarding transit fees, stating on the 'X' platform: "Iran has always been the guardian of the strait, and it will remain so." He added: "A 20% fee is extremely high, of course," and continued, "We will be fair."

Escalating Risks to Oil and Gas Supplies via Hormuz

The Joint Maritime Information Center reported that the U.S. Central Command would begin implementing a blockade on all Iranian ports and coastal areas at 4 PM New York time on Tuesday.

Meanwhile, the UAE reported that two of its tankers were attacked by Iranian forces in Omani waters while transiting the southern route of the strait.

The conflict also showed signs of widening beyond the Strait of Hormuz, as Saudi air defenses intercepted ballistic missiles fired by the Houthis in Yemen toward the southern region of the country, according to a spokesman for the Ministry of Defense cited by 'Al-Ikhbariya' channel.

Elsewhere, Trump will support a bill imposing sanctions on Russia adopted by the late Senator Lindsey Graham, according to a White House official who spoke to 'Bloomberg' on condition of anonymity.

This would revive efforts to penalize buyers of Russian oil and natural gas, increasing pressure on the Kremlin to end its war with Ukraine.

Renewed Tensions Boost Prices

Crude oil has rebounded to its highest levels in a month, reversing a nearly 30% decline during the second quarter, as the escalation of the conflict reignites concerns over supply from the Middle East.

Iran managed to export at least 57 million barrels of crude oil during a short period between two U.S. maritime blockades, highlighting the stakes for the global oil market after the restrictions were reimposed.

Jay Hatfield, CEO of Infrastructure Capital Management, told 'Bloomberg': "They were shipping oil at incredible rates." He added: "We believe prices will stay near the $80 level, unless there is a significant shift one way or another regarding the strait."

He continued: "But I don't think we'll reach $90 or $100, for example," warning that "if the strait is reopened, we will drop to $60 insanely fast."

Earlier on Monday, Tehran stated that the agreement with Washington "has undoubtedly entered a crisis stage," and that it would not adhere to its terms as long as the other party violates its commitments.