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Oil Surges 7.8% After Trump Reverses Hormuz Toll Policy, Strikes Iran
Brent crude jumps 7.8% to $81.92 after Trump reinstates Hormuz blockade and announces 20% toll on cargo. Iran mocks the plan, saying it will be 'fair.' Strikes resume as U.S. sets Tuesday deadline for port blockade.
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The U.S. launched a new round of strikes on Iran on Monday, hours after President Donald Trump said Washington is reinstating a blockade on Iran in the Strait of Hormuz. Trump also reversed a previous policy and will now charge other ships for safe passage. The exchange of fire threatened a return to all-out war.
U.S. Central Command announced on social media that the military had begun another round of strikes against Iran. "These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz," the U.S. military said.
Trump called it "another major attack." "We're hitting them very hard. And it'll continue, and we'll see what happens," he told reporters in the Oval Office. "We're knocking out all of their offensive capability and we're controlling the straits. We're putting the blockade back."
Trump also provided new details on the administration doing an about-face and suggesting it will charge tolls for ships going through the strait, after previously suggesting that it wouldn't. "We're protecting a very rich portion of the world," he said. "We're spending money. And so, what we've done is, we are going to be reimbursed for protection."
It's a change in U.S. policy that, until now, said the strait should remain open to all without tolls, as it was before the U.S. and Israel attacked Iran on Feb. 28. Any attempt by the U.S. or Iran to charge fees would violate global norms on freedom of navigation and raise tensions, likely causing further economic disruption far beyond the region.
The price for a barrel of Brent crude oil, the international standard, rose 7.8% to $81.92 a barrel on Monday. That remains well below the nearly $120 reached at the height of the war.
Earlier, Trump told conservative radio host Hugh Hewitt that the agreement reached last month was "built to test" Iran, adding that "when you're dealing with sleazebags don't mean much." Trump said he questioned why the U.S. was entering into a deal to create a ceasefire with Iran rather than moving toward a full deal first. Trump last week declared the ceasefire was "over." "They didn't honor the test," the president said.
Exchanges of fire in recent days, sparked by Iranian attacks on ships, had already cast further doubt on the interim peace deal. Washington had lifted a blockade it imposed in mid-April as part of that deal, which also called for the strait to be fully reopened.
"We are reinstating the THE IRANIAN BLOCKADE," Trump said on social media. "All other countries will have fair and open use of the Strait." The president said the U.S. would be "reimbursed" by 20% of the value of cargo to help cover "any and all costs necessary to do the job of providing safety and security." The U.S. military said it will resume its blockade of Iranian ports Tuesday at 4 p.m. EDT.
Iran asserts it has the right to manage traffic through the strait and potentially charge fees in accordance with the interim peace deal. The U.S. has disputed that.
Iran on Monday vowed to fight back against any U.S. interference in the strait. Iran's Foreign Minister Abbas Araghchi mocked Trump on social media and used his support for tolls to legitimize Iran's position. "POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service," Araghchi wrote on X. "Iran has always been the GUARDIAN of the Strait and will remain so FOREVER. 20% is of course too much. We will be fair."