Oil prices rise as US prepares to reinstate Hormuz strait blockade, charge 20% 'on all cargo shipped'

Key Points:

• Oil prices surged sharply on Monday after President Trump announced the US would reimpose a blockade on the Strait of Hormuz and begin charging a 20% fee on all cargo passing through the waterway, starting Tuesday, July 14.
• The US Central Command stated the military would enforce the blockade against vessels to and from Iranian ports, redirecting compliant vessels and disabling non-compliant ones during the initial blockade period earlier this year.
• The announcement escalates tensions in the Middle East, with Iran retaliating against US military strikes and declaring the peace agreement in crisis, while insisting the Strait of Hormuz is effectively closed due to US actions.
• Despite the spike, oil prices remain below March wartime highs, with futures indicating Brent crude is expected to trade near $80 per barrel by December, though strategists warn further escalation could push prices higher.
• The conflict has significantly reduced voyages through the Strait of Hormuz by 52% week-on-week, with vessels adopting defensive measures such as "dark" crossings to avoid tracking amid the volatile situation.