The price of crude oil on global markets continued to surge Tuesday, with international oil benchmark Brent rising for a second straight day to more than $87 per barrel, the first time since June it has traded at that price.
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U.S. crude oil also moved higher, rising 4% from Monday to more than $81 per barrel.
Since the start of trading on Sunday night, Brent oil has risen more than 15% and U.S. crude oil has risen more than 12%.
The moves higher came just hours before the U.S. was set to reimpose a blockade on Iranian ports and ships in the Strait of Hormuz, and after U.S. Central Command completed five hours worth of fresh strikes on Iran overnight.
“U.S. forces successfully struck military targets across Iran including Bushehr, Chah Bahar, Jask, Konarak, Abu Musa, and Bandar Abbas to further degrade Iran’s ability to attack commercial shipping,” the U.S. military said Monday night in a statement on social media site X.
The U.S. military’s naval blockade on Iran’s coastline and ports, as well as all Iranian-associated vessels in the Strait of Hormuz, will go into effect at 4:00 p.m. ET, 12:30 a.m. Wednesday in Tehran.
“The return of the U.S. blockade is much more impactful for markets than the previous suspension of the sanction waiver on Iranian oil,” ING commodities analysts wrote in a note Tuesday.
“The Memorandum of Understanding is starting to look well and truly dead,” they added, referring to a deal signed between Trump and the Iranians in mid-June that officials had said would end the combat phase of the conflict.
Meanwhile, commercial shipping traffic in the strait continues to fall in response to the renewed fighting and breakdown in secure passage for vessels.
On Friday, 19 ships transited the critical waterway, a figure that rose to 24 on Saturday. By Monday, that number had fallen by more than half to just 10 vessels, according to data from Kpler.
“The U.S. continues to say that the Strait of Hormuz is open,” the ING analysts wrote. “But given the growing risk of attack, these comments will offer little comfort to ships. This is reflected in ship tracking data, which shows that vessel crossings yesterday fell to just a trickle.”
To add to the worries of mariners, President Donald Trump on Monday said that the U.S. would seek to be “reimbursed” for protecting ships in the strait. Trump added that the fee would be “at the rate of 20% on all cargo shipped.”
“There is no legal basis through which to introduce mandatory tolls simply to transit through a strait,” the International Maritime Organization Secretary General Arsenio Dominguez said in a statement on Monday.
The major global shipping company Hapag-Lloyd echoed that sentiment, saying in a statement to NBC News Tuesday that “It would be fundamentally wrong to charge fees for passage through international waters.”
“A 20% fee on a [Very Large Crude Carrier] that carries 2m barrels at $80/barrel, would be equivalent to around $32m or an additional cost of $16/barrel,” ING’s analysts noted, using the financial shorthand for millions.
That fee, they added, would be “significantly higher than the $1/barrel toll for which Iran has been pushing.”
