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Crude rebounds as U.S. reinstates blockade and 20% toll on Hormuz
Oil prices have given back most of the prior decline since mid-June, with traffic through the Strait of Hormuz down to about one-third of normal pace and Monday strikes reaching Iran’s Khuzestan province.
Crude oil prices rose sharply after the United States said it will reinstate its blockade of Iranian shipping and collect 20% of the value of every cargo it allows through the Strait of Hormuz, according to FXStreet. West Texas Intermediate traded near $75.00, up close to 5%, while Brent moved near $80.00.
FXStreet said the market has shifted from pricing a brief period of partial normalization to repricing the collapse of a framework after the prior week’s move pushed WTI back toward about $67.00. The outlet also noted the mid-June memorandum of understanding explicitly barred Tehran from charging commercial ships for passage, and that Oman argued at the International Maritime Organization that transit through an international strait cannot be tolled.
The analysis highlighted that the 20% levy plan could be treated differently legally than a wartime blockade, but market pricing is focused on whether a rules-based route back to normal traffic is accepted by combatants. FXStreet pointed to shipping-market estimates showing it can cost roughly double to charter a tanker to lift cargo from inside the strait to Asia versus loading outside it, with war-risk insurance premiums added on top.
FXStreet said traffic through the waterway is running at roughly one-third of its normal pace, and it cited Iranian warning shots fired at two ships attempting passage on Monday morning. It also said Monday strikes reached Khuzestan, Iran’s main producing province, leaving risk on both sides of the ledger, with barrels blocked at the strait and barrels hit at the source.
Latest closeWTI crude $78.04 ▲9.3%|Brent $83.15 ▲9.4%