Oil Prices Climb After U.S. Bombs Iran and Reinstates Blockade
Oil prices are moving higher again after a new round of military action in the Middle East.
The U.S. launched airstrikes on Iran and at 4:00 p.m. Eastern Time restarted a naval blockade of Iranian ports and coastal areas. U.S. Central Command, known as Centcom, announced the moves.
By the end of the day, U.S. benchmark West Texas Intermediate crude had gained 1.5% and settled at $79.34 a barrel. International benchmark Brent crude rose 1.72% to $84.73 a barrel.
This is not the first disruption in the region. On February 28, the United States and Israel carried out airstrikes against Iran. Prior to those attacks, roughly one-fifth of global oil supply was moving through the Strait of Hormuz - a narrow waterway between the Persian Gulf and the Gulf of Oman. That flow had dropped sharply after the fighting started, but it had started to recover after a temporary deal between the U.S. and Iran was signed on June 17.
On the Sunday before this article was published, about 8.5 million barrels of oil passed through the strait. Those numbers could shift again depending on how long the new blockade lasts.
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The Strait Fee That Never Happened
In a twist, President Trump also dropped a plan that had been hanging over the shipping industry. Trump had ordered that a 20% surcharge be applied to cargo carried by ships using the Strait of Hormuz, to cover U.S. military protection costs.
That idea had been widely unpopular. A United Nations body, the International Maritime Organization, declared that imposing compulsory fees in the strait violates international law. Under the interim deal signed in June, Iran had agreed not to impose its own toll for safe passage through the strait - for 60 days.
In exchange, the U.S. had been backing off some of its demands. Now that the U.S. has launched fresh airstrikes and a blockade, that deal looks shaky.
By dropping the fee, Trump removed one source of tension with the shipping industry. But the military escalation adds a different kind of pressure. The Revolutionary Guard, Iran's military force, said it attacked two supertankers in the strait.
Those tankers belong to ADNOC, the state oil company of the United Arab Emirates. So the waterway remains dangerous, even without a toll.
The Strait of Hormuz has long been a critical chokepoint for global energy flows. The June 17 truce allowed a partial recovery in traffic, but the latest airstrikes and blockade, combined with Iran's attacks on commercial vessels, have reintroduced significant instability. The region's history of conflict means that any military escalation can quickly disrupt supply routes.
What It Means for Your Portfolio
Oil prices have risen following this latest escalation, and the Strait of Hormuz remains a critical chokepoint for global energy flows. The 1.5% move on this news is not enormous, but it adds to a string of similar jumps over the past few months. Each escalation raises the risk that supply gets cut off for longer.
The bottom line: Investors should keep an eye on whether the new airstrikes and blockade actually slow oil traffic again. If shipping through the strait drops, prices could push higher. If the situation de-escalates quickly, the recent gains might fade.
Either way, the uncertainty alone is enough to keep oil markets on edge. That kind of volatility matters for anyone with exposure to energy stocks, commodity funds, or even just a retirement account that holds a broad market index. Oil prices touch everything, and the Strait of Hormuz is where a lot of that touch starts.
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