Oil prices experienced a significant jump, with West Texas Intermediate futures rising 9.4% to settle near $78 per barrel, reaching their highest level in nearly a month. Brent crude closed above $83 per barrel, and prices continued to climb in post-settlement trading after President Trump threatened further strikes against Iran.
This surge followed President Trump's announcement to reinstate a blockade on Iranian ships in the Strait of Hormuz and impose a 20% charge on all other cargo transiting the strategic waterway. This move, which would amount to approximately $32 million for a fully loaded supertanker, reignited concerns over global energy supplies and led to analysts like Rebecca Babin of CIBC Private Wealth Group noting that the market is repricing geopolitical risk. Saul Kavonic, senior energy analyst at MST Marquee, suggested oil could reach $100 per barrel if the conflict escalates to target key facilities more broadly.
The escalation comes after a weekend of tit-for-tat strikes between the U.S. and Iran, including attacks on energy infrastructure, which largely dashed hopes for easing tensions and normalizing shipping through Hormuz. The Joint Maritime Information Center confirmed U.S. Central Command would begin enforcing the blockade of Iranian ports and coastal areas, increasing the risk of further attacks on commercial shipping. The International Maritime Organization reiterated its opposition to charging fees for passage through international straits, and shipping traffic through the strait has already seen a significant slowdown, with only six vessels tracked crossing on Sunday compared to 18-22 daily crossings earlier in the month.
