Brent crude climbed past $87 a barrel for the first time in a month as the U.S. and Iran intensified their standoff over the Strait of Hormuz, dashing hopes that traffic through the vital shipping lane could soon return to normal.
The global oil benchmark rose 4.9% to $87.39 a barrel in afternoon European trading on Tuesday, while the U.S. oil gauge West Texas Intermediate gained 3.8% to $81.09 a barrel. Both contracts surged nearly 10% in the previous session.
President Trump said the U.S. would reimpose a naval blockade on ships entering and leaving Iranian ports, with U.S. Central Command forces set to enforce the measure from 4 p.m. ET.
"The return of the U.S. blockade is much more impactful for markets than the previous suspension of the sanction waiver on Iranian oil," analysts at ING said. "The memorandum of understanding is starting to look well and truly dead."
Trump also said the U.S. would keep the Strait of Hormuz open and charge a 20% fee on all cargo transiting the waterway in exchange for providing security, though he offered no details on how the plan would operate.
If implemented, the fee would add about $16 a barrel, or around $32 million, for a fully loaded very large crude carrier carrying 2 million barrels at $80 a barrel, far exceeding Iran's proposed toll, according to ING.
The latest announcements followed days of back-and-forth strikes that began after Iran fired on commercial vessels last week, marking the sharpest escalation between Washington and Tehran since the mid-June ceasefire.
As risks mount, shipping activity in the Persian Gulf has slowed significantly.
Before the U.S. and Israel launched strikes on Iran at the end of February, roughly one-fifth of global oil supplies passed through the Strait of Hormuz. According to data provider Kpler, confirmed crossings by commodity-carrying vessels fell to 11 a day between July 11 and 13 from 30 a day between July 1 and 10.
Even so, oil markets aren't yet pricing in a prolonged supply shock. Traders appear to be betting that ample global inventories, subdued Chinese crude demand, alternative export routes in the Middle East and some demand destruction will cushion the impact of any near-term disruption.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
July 14, 2026 07:24 ET (11:24 GMT)
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