Oil prices surged 5% on Monday after Donald Trump reinstated the US blockade of the Strait of Hormuz and announced a 20% toll on other countries’ cargo, sending shockwaves through global markets. Brent crude climbed to $79.37 a barrel as the US and Iran exchanged strikes amid an escalating standoff over the vital trade route.
Trump said on social media: “The USA will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT’,” adding that the arrangement would “begin immediately”. The 20% toll on eligible cargo is to cover the cost of “providing safety and security to this very volatile section of the world”. The US Navy will stop Iranian ships entering or leaving the strait, the president said.
“Oil prices jump 5% after Trump reinstates Strait of Hormuz blockade and announces 20% toll on cargo.”
The move cast fresh doubt over hopes that normal flows of Gulf oil and gas into the global market will resume after months of disruption because of the war. A fifth of the world’s oil supply normally passes through the Strait of Hormuz.
Stock markets fell sharply. In Asia, South Korea’s Kospi dropped 8%, while Japan’s Nikkei 225 and China’s Shanghai Composite each fell 2%. Chip companies were hit particularly hard: shares in South Korea’s SK Hynix slumped 15% and its rival Samsung Electronics sank 10%. In the US, the tech-heavy Nasdaq was down 1% and the S&P 500 fell 0.4%. Airline shares on both sides of the Atlantic also declined.
The escalation followed a weekend of rising tensions. US Central Command said on X that it launched strikes against Iran on Sunday evening “to continue degrading their ability to attack civilian mariners and commercial ships freely transiting the strait of Hormuz”. It added that Trump “has directed the strikes to hold Iranian forces accountable”. Iran retaliated with its own strikes.
Oil had been trading at $72.48 a barrel before US-Israeli strikes on Tehran in late February, and reached highs of $120 in April. The latest cycle of attacks threatens to inject fresh volatility into markets already reeling from months of Middle East conflict.
