Trump Threatens to Claim Strait of Hormuz as US Territory

President Donald Trump said late Friday he will soon declare the Strait of Hormuz territory of the United States, a threat that would give Washington control over the world's most important oil chokepoint.

"Pretty soon I'll be declaring the Strait of Hormuz territory of the US," Trump said, according to a pool report. He warned that any Iranian aggression would be met with a response "hundred times harder" and emphasized that the US only permits vessels to enter the strait at its discretion. The blockade, he said, is "unstoppable."

The Strait of Hormuz handles roughly 20% of global oil shipments. A unilateral US claim or blockade would risk a direct military confrontation with Iran and disrupt tanker traffic. The comments drove oil futures higher in after-hours trading, with Brent crude jumping more than 2% on the news, traders said.

The dollar strengthened against most major currencies as investors sought safe havens. The yen and Swiss franc gained, while oil-linked currencies such as the Canadian dollar and Norwegian krone also rose on the crude rally. The move threatens to reignite inflation concerns, just as the Federal Reserve weighs its next rate decision.

Trump said the US would pay "a tiny little price for gasoline" and that he would hit Iran "hard economically." He added that he does not care if the economic pressure comes before the midterm elections. The comments mark his most aggressive stance on Iran since leaving office.

No immediate response from Tehran was available. The US military did not comment on the operational feasibility of such a declaration. Oil markets will fully price the risk when electronic trading opens Sunday evening.