Trump announces blockade of Iran and wants 20% toll on Hormuz shipping

Tensions in the Middle East are escalating further as Donald Trump reinstates a blockade on Iranian ports while simultaneously proposing a 20% toll tariff on cargo transported through the Strait of Hormuz. The oil price reacts immediately and sharply to the news.

Blockade and military strikes go hand in hand

The US Central Command reports that the enforcement of the blockade will begin on Monday 14 July at 4:00 p.m. New York time. This coincides with a third consecutive night of US airstrikes on Iran, further escalating the situation.

The blockade targets all vessels entering or leaving Iranian ports. In addition to this measure, Trump announces that ships using the Strait of Hormuz can expect a 20% levy on their cargo. Hormuz is one of the world’s most important oil routes, meaning this plan could have global consequences for the energy market.

Brent oil surges after announcement

Markets react immediately to the news. Brent crude oil rises by around 10% and is trading near $83.63 per barrel, reports Bloomberg. A rise of this magnitude in a short period shows how sensitive energy markets are to geopolitical tensions around the Strait of Hormuz.

Analysts point out that a blockade on Iranian ports combined with a toll levy on one of the busiest shipping routes in the world could have major consequences for the global oil supply. Approximately 20% of the world’s oil is transported via Hormuz, meaning disruption of this route is immediately felt at the pump and in the financial markets.