The United States reinstated its naval blockade of Iran on Tuesday and declared it would charge a 20 per cent fee on all cargo passing through the Strait of Hormuz, triggering a sharp spike in global oil prices. Brent crude, the international benchmark, rose 9.6 per cent on Monday and climbed a further 2 per cent in early Asian trading to reach $84.98 a barrel, its highest level since the two countries signed a memorandum of understanding to end their war on 17 June. US West Texas Intermediate crude advanced 2.1 per cent to $79.79. The US Central Command said the blockade, which applies to all vessels entering or leaving Iranian ports regardless of flag, would take effect at 4 p.m. New York time on Tuesday.

Viewed from Washington, the measures are presented as a response to Iranian attacks on commercial shipping and a means of securing reimbursement for the protection the US Navy provides to regional states. President Donald Trump stated that the US would “control” the strait and that countries including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait would effectively pay for that security. Tehran, through its semi-official YJC news agency, reported seven explosions in the port city of Bandar Abbas and two on Kish Island as the US military conducted a third consecutive night of strikes. Iran’s Islamic Revolutionary Guard Corps claimed it had struck two large oil tankers in the strait and launched missile and drone attacks against US facilities in Kuwait and Bahrain. The UAE defence ministry said two of its tankers were hit by Iranian cruise missiles in Omani waters, killing one Indian crew member and wounding eight others.

The escalation has injected fresh supply risk into energy markets. Shipping data showed the number of tankers transiting Hormuz fell to a two-month low, and analysts in Singapore warned that any prolonged reduction in vessel movements could push prices higher still. Before the conflict, roughly one-fifth of the world’s oil and liquefied natural gas passed through the strait. The International Energy Agency had noted that flows recovered to about 4.1 million barrels per day in June after the temporary truce, but that remained well below pre-war levels. Maritime law specialists in London and the International Maritime Organization have pointed out that there is no legal basis under the UN Convention on the Law of the Sea for a coastal or protecting state to impose a mandatory toll for simple transit passage, and that such a move would violate the principle of freedom of navigation.

The renewed hostilities unwind the fragile calm established by the 17 June memorandum, which had allowed Iran to export at least 57 million barrels of crude during a brief interlude. The US administration has also signalled support for new sanctions legislation targeting Russian oil buyers, adding to the geopolitical pressure on energy flows. With the blockade now in force and US strikes continuing, the immediate focus of markets is on whether physical crude movements through Hormuz are materially disrupted. Trump is expected to address the nation on Thursday, while no new diplomatic channel has been publicly announced.