Oil Surges 2% on Trump's Hormuz Fee Plan, Blockade Threats

Trump said Monday on Truth Social that the U.S. will charge a 20% fee on all cargo shipped through the strait, describing the U.S. as the "guardian" of the waterway. He also said Washington would reinstate its blockade of Iranian ports near the strait. U.S. Central Command said the blockade would take effect at 4 p.m. ET Tuesday.

Citi warned the proposal materially raises the risk of further military escalation. The bank said the likelihood has increased that Iran walks away from the interim agreement until after the U.S. midterm elections, a scenario that would keep oil prices higher for longer.

Roughly one-fifth of global oil supplies moved through the Strait of Hormuz before the U.S. and Israel struck Iran on Feb. 28. Traffic slumped after Iran began targeting vessels in March but had started to recover following an interim deal between Washington and Tehran.