President Donald Trump reimposed the United States naval blockade of Iranian ports on Monday, declared himself the “GUARDIAN OF THE HORMUZ STRAIT,” proposed charging commercial shippers a 20% toll on all cargo transiting the waterway, and threatened to strike Iran’s bridges and power plants “next week” unless Tehran returns to the negotiating table — a set of announcements in a 24-hour period that sent global oil markets to their biggest single-day gain since May 2020 and projected US gasoline prices toward $4 per gallon within days.
The Blockade Announcement and Market Response
The price of oil jumped more than 9% after President Donald Trump declared on social media Monday that the US would resume its blockade on Iran and be “reimbursed” for helping ships transit the Strait of Hormuz. Brent crude futures advanced 9.6% to close at $83.30 per barrel — the international benchmark’s best daily performance since May 2020. West Texas Intermediate futures gained 9.4% to settle at $78.14.
Trump announced the blockade’s reinstatement in a Truth Social post: “We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait.”
CENTCOM said the blockade, which would take effect at 4 p.m. ET Tuesday, applies to vessels transiting to or from Iranian ports and coastal areas. A previous blockade ran from April 13 to June 18, during which CENTCOM forces redirected more than 140 compliant vessels, disabled nine non-compliant ships, and allowed over 50 commercial vessels to transit under escort.
The US military’s naval blockade of ships going to and from Iranian ports resumed at 4 p.m. ET, US Central Command said in a post on X. The blockade restarts a day after President Donald Trump said it would be reinstated and the US would act as the “guardian” of the Strait of Hormuz.
What Trump Threatened Iran With Next
Trump’s announcements went significantly beyond the blockade itself. President Donald Trump warned that the US would strike bridges and power plants in Iran “next week” unless Tehran returns to the negotiating table. He said Iran won’t “have anybody left” if it doesn’t make a deal.
On the toll: Trump said Monday that the US would charge commercial shippers 20% of the value of their cargo to reimburse the US for “providing safety and security” in the strait. But he reversed course on Tuesday, saying Arab states in the Persian Gulf would make “Trade and Investment Deals.” The reversal on the toll — proposed and then walked back within 24 hours — reflects the fundamental contradiction in Trump’s Hormuz messaging: declaring the US the guardian of the strait while simultaneously insisting the US does not want to impose Iranian-style tolls on international shipping.
What Has Already Happened in the Strait This Week
The weekend that preceded the blockade reimposition saw the most intense US-Iran military exchange of the week. US Central Command said late Tuesday stateside that it had carried out another wave of strikes against Iran late Tuesday, targeting dozens of military assets near the Strait of Hormuz and along Iran’s coastline in a seven-hour operation. The attacks, involving fighter aircraft, drones and naval vessels, struck missile and drone facilities, naval assets and coastal defense systems.
Iran responded by striking what it described as “two non-compliant” supertankers in the strait and launching missiles and drones at US military infrastructure in Bahrain and Jordan. The UAE’s defense ministry confirmed that Iranian cruise missiles hit a pair of its oil tankers as they passed through Omani waters in the strait, leaving one Indian seafarer missing.
The Shipping Industry’s Response
Even before Trump’s Monday announcement, traffic in the strait had plunged 52% week over week, according to data from MarineTraffic by Kpler. The marine research firm said 19 ships transited the strait on Friday, rising to 24 on Saturday, before falling again to 14 on Sunday.
Patrick De Haan, analyst at GasBuddy, said he expects “the national average price of gasoline to reach $4 per gallon in the next 7-10 days, if not sooner,” with retailers starting to pass along increases “in the next 24-48 hours.”
Citi cautioned that renewed hostilities substantially increase the chances of a broader military confrontation, adding that Tehran could opt to abandon the memorandum of understanding altogether until after US midterm elections — an outcome the bank said would put sustained upward pressure on crude prices.
Iran’s Position — “No Obligations to the MoU”
Iran’s deputy foreign minister, Kazem Gharibabadi, said that Tehran has “no obligations” to the 14-point agreement with the US that was reached last month. That statement — the most explicit Iranian rejection of the Versailles ceasefire framework yet — means the diplomatic architecture that had provided the structure for both the original ceasefire and the Doha talks has now been formally repudiated by one of its signatories.
As the ceasefire struck in June unraveled, Trump declared last week at a NATO summit in Turkey that the agreement was “over.” The truce had been under strain for weeks as both sides disputed language in the memorandum of understanding over who controls traffic through the strait.
What the Analysts Are Saying
“Until something changes with the status of the Strait, we believe the bias remains for higher oil prices and, in turn, higher expected inflation and interest rates, and episodes of equity price volatility,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in a note.
Brent crude futures for September rose 0.95% to $85.53 in Wednesday trading — a sign that Monday’s gains are consolidating rather than reversing. With the blockade now in effect, the Hormuz southern corridor contested, Iran rejecting the MoU, and US strikes entering their fourth consecutive night, the trajectory for oil prices in the near term remains upward — with all that implies for global inflation, monetary policy and economic growth in a world already running at its weakest growth rate since the COVID-19 pandemic.
