Oil prices surged on Tuesday, reaching their highest level in a month, as renewed military actions by the United States and Iran intensified concerns about disruptions to global crude flows through the Strait of Hormuz. The market reaction follows U.S. President Donald Trump’s announcements regarding new shipping fees in the vital waterway and the resumption of a naval blockade targeting Iranian ports in the region.
As of 9:46 AM (Bangkok time), West Texas Intermediate crude for August delivery advanced by 1.04% to $78.95 a barrel, while Brent crude for September delivery increased 0.53%, reaching $83.74. These gains built on a sharp 9% rise during the previous session, marking Brent’s largest single-day increase since May 2020.
On Monday, President Trump outlined a plan to impose a 20% charge on all cargo passing through the Strait of Hormuz, emphasizing America’s security role in the oil transit corridor. He also indicated that the blockade of Iranian ports would be reinstated, a move confirmed by U.S. Central Command to take effect at 4:00 PM Tuesday.
The announcements come amid a backdrop of escalating hostilities, with the U.S. and Iran carrying out strikes against each other and heightened confrontations affecting shipments.
The risk of continued conflict was underscored further after two United Arab Emirates tankers were reportedly struck by Iranian cruise missiles in Omani waters near the southern lane of the strait, according to the UAE’s Ministry of Defence. The attack resulted in the death of one Indian crew member and injuries to eight others.
Analysts cautioned that the latest round of escalation could keep oil prices elevated, particularly given that no full closure of the oil passageway has been enforced, but overall supply prospects remain highly uncertain. Citi noted that the imposition of shipping fees could increase the likelihood of Iranian disengagement from current agreements, which might sustain higher crude prices.
Shipping activity through the Strait of Hormuz had declined after Iran targeted vessels in early March, but began to pick up again following a temporary agreement between Tehran and Washington last month.
Additional regional instability emerged when Yemen’s Houthi movement fired missiles at Saudi Arabia in retaliation for alleged strikes on territory under its control, prompting concerns that crude flows from the broader Middle East could face new risks if Red Sea shipping lanes are affected.
