President Donald Trump has reimposed a US naval blockade on Iranian vessels in the Strait of Hormuz and demanded a twenty percent fee on all other cargo transiting the crucial waterway.

Trump's declaration on Monday, in which he proclaimed the US would act as the waterway's "GUARDIAN," escalates a simmering dispute between Washington and Tehran over control of the vital shipping channel, which is central to the renewed conflict between the two nations.

US Central Command stated that military forces will resume blocking traffic to and from Iranian ports and coastal areas starting at 4 p.m. New York time on July 14. Later on Monday, Centcom announced on social media that the US had commenced a "third consecutive night of strikes against Iran" as of 4:45 p.m.

Trump had pledged to continue attacks on Iran, telling a radio interviewer, "we're going to hit them very hard tonight, and we're going to hit them hard tomorrow." In the Oval Office, he later told reporters the strikes targeted Iran's capabilities "for anything having to do with the strait."

Oil prices extended their rise in after-hours trading, with Brent crude gaining roughly ten percent to trade near $83.63 a barrel by 4:15 p.m. New York time, while stocks and bonds declined.

Earlier on social media, the president asserted the strait "will remain OPEN, with or without Iran." While Iranian ships would be barred, vessels from other nations could pass. However, the US "as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped," Trump wrote.

The White House did not offer further specifics on the proposed fee, including how it would be implemented or if US allies in the Gulf had been notified.

More than ten individuals involved in shipping markets, including several with vessels that recently transited Hormuz, said they were caught off guard by the announcement of a potential cargo fee. They indicated it was premature to understand the practical implications of the plan or its impact on their transit decisions.

The reinstated blockade on Iranian ports could lead the Islamic Republic to intensify attacks on ships attempting to pass through the Strait of Hormuz, continuing a cycle of retaliatory strikes seen over the past week. Transits through the strait fell to their lowest level in a month on Sunday, according to ship-tracking data.

Iran views any challenge to its authority in the strait as a violation of the interim peace agreement it reached with the US. That deal allowed for toll-free commercial shipping during a 60-day negotiation period and required Tehran to "make arrangements" for vessel safety. Iran continues to insist that ships must obtain permission and follow approved routes.

Earlier on Monday, Iran's government stated the agreement with the US had "undoubtedly entered a crisis phase" and that it would not adhere to its terms as long as the other party violated commitments. The Iranian Foreign Minister derided Trump's toll proposal.

"Iran has always been the GUARDIAN of the Strait and will remain so FOREVER," he posted on social media. "20% is of course too much. We will be fair."

"At least rhetorically, Trump appears to be trying to play the Iranians at their own game," said a senior fellow at the Washington Institute for Near East Policy. "Rest assured, the Iranians won't be giving up the strait that easily."

Trump's latest move highlights his precarious position just over three weeks after signing a memorandum of understanding. That deal secured a ceasefire and temporarily eased the bottleneck in the strait, which lowered oil prices and promised to reduce gasoline costs ahead of the US midterm elections in November.

However, with armed hostilities resuming and Iran reasserting its claim over the strait, Trump is now seeking to regain leverage.

Trump told reporters in the Oval Office on Monday that despite the new strikes, "I think a deal is possible."

Impact on Costs

Nevertheless, any new fee risks increasing fuel costs. A twenty percent charge would amount to approximately $32 million for a fully-loaded very large crude carrier at current oil prices. This is significantly higher than tolls previously charged by Iran, which have been described as reaching up to $2 million, according to informed sources.

The Strait of Hormuz is a critical artery for energy and other commodities, having facilitated about one-fifth of global oil flows before the US and Israel began strikes on Iran in late February. Iran's efforts to close the waterway during the conflict drove up global energy prices and created political repercussions for Trump.

Trump had celebrated the interim peace agreement by highlighting its potential positive impact on gasoline prices and the economy, an acknowledgment of his eagerness to move past the conflict.

Other nations and industries dependent on traffic through the narrow waterway have insisted it should remain freely accessible, without tolls or maritime service charges. Several US officials, including the Secretary of State, and Trump himself had previously stated the strait should stay open to all.

Trump, however, signaled a shift earlier Monday, stating on a news network that the US should be compensated for helping maintain traffic flow through the strait. He alleged other countries "made all the money" previously. Insisting on compensation could strain relations with Gulf allies that export energy through Hormuz.

"We guarded it for nothing, and now we're going to guard it, and we're going to get paid for guarding it — a lot of money," Trump said. "But we just want to be reimbursed for doing all of this, for putting our people in danger."

Trump has repeatedly sent mixed signals about his plans for the strait and has previously suggested the US should derive financial benefit from it. Earlier in the conflict, he floated the idea that both Iran and the US would receive compensation from shippers using the strait.

Potential Obstacles

Trump's plan represents a monumental undertaking that could provoke backlash from US industries and allies, while potentially contravening international law if not strictly limited to escorted vessels.

Under international law, ships generally have a guaranteed right of transit passage through waterways used for international navigation, and coastal states are not permitted to charge vessels for passage. Charges can, however, be levied for some "specific services" rendered to individual ships.

A spokesperson for the International Maritime Organization, the UN's shipping agency, reiterated that the body "stands firmly against charging fees for passage through straits used for international navigation."

In recent weeks, US forces have conducted operations to escort oil tankers and commercial ships through the strait, using air and naval power to encourage traffic on a southern route, farther from Iran's coast, even as Tehran asserted control over the waterway.

Yet analysts have stated that a more extensive military operation, potentially involving ground troops, would be necessary for the US to maintain control of the strait—an action Trump has so far been unwilling to take.

Other administration efforts to protect shipping in the strait during the conflict have yet to fully materialize. In March, Trump directed the US International Development Finance Corporation to provide political risk insurance and guarantees for maritime trade through the region.

While the DFC later announced a $40 billion reinsurance facility with private partner support, it remains unclear whether any coverage has actually been provided.