Brent Crude Surges Over 9.4% in Biggest Daily Jump Since 2020 after New Iran Blockade
Brent crude settled around $83.2 per barrel on Monday, posting its strongest single-session gain since May 2020. The high jump was expected after Trump reinstated a naval blockade against Iran and imposed a 20% cargo toll on Strait of Hormuz transits.
Oil prices rocketed higher on Monday, as U.S. President Donald Trump announced that the United States would reintroduce its blockade targeting Iranian vessels and demanded a 20% levy on all cargo passing through the Strait of Hormuz.
Brent crude price today jumped over 9.4% to close around $83.2 per barrel, marking the international benchmark's best daily performance since May 2020. WTI price also climbed more than 9% to settle at around $78.
Trump declared the reinstatement of what he called "the Iranian blockade" on his social media platform, insisting it would only halt Iranian ships or its customers. He pledged that all other nations would retain fair and unrestricted access to the strategic waterway, but demanded compensation equivalent to one-fifth of all shipped cargo as reimbursement for US protection efforts.
The blockade resumption follows a weekend of intense military exchanges. US Central Command confirmed it launched an additional attack against Iran on Sunday, building on the roughly 140 targets struck on Saturday. Those operations were a direct response to the Iranian's IRGC attacking a ship transiting the Strait of Hormuz.
Iran retaliated on Sunday with missile and drone barrages aimed at US military installations in middle east, according to the state-run Tasnim news agency.
Iranian state media reported that the IRGC had shut down Hormuz indefinitely. The U.S. military swiftly rejected that assertion, with Centcom stating the strait remains accessible to "all vessels seeking to lawfully transit" and insisting that Iran does not control the strait.
The Joint Maritime Information Center, a US-led coalition based in Bahrain, confirmed that the route through Omani waters stays open for outbound shipping as well as inbound shipping, but warned the security environment remains grave. It urged mariners to maintain "extreme vigilance."
The weekend airstrikes represent the fourth round of US bombing against Iran in the past 7 days alone, each retaliating for aggression on commercial vessels navigating the southern area that is protected by American forces. Tehran is demanding that ships instead use the route in the north through its territorial waters as it asserts authority over the strait.
At the root of the renewed hostilities are conflicting interpretations between Washington and Tehran over how Hormuz was meant to reopen under the interim peace agreement signed last month. Approximately one-fifth of global oil supplies passed through the strait before the US and Israel struck Iran on February 28. Traffic plummeted after Iran began targeting ships in the strait about four months ago.
Related assets: Crude Oil, Brent Crude