Global oil prices climbed above $80 per barrel on Monday after renewed military tensions between the United States and Iran heightened concerns over crude supplies moving through the Strait of Hormuz, one of the world’s busiest energy shipping routes.
The latest rally followed fresh exchanges of missile and drone attacks between both countries, raising fears of possible disruptions to the strategic waterway through which roughly 20 per cent of global oil consumption passes daily.
US President Donald Trump announced plans to introduce a 20 per cent charge on cargo transiting the Strait of Hormuz, arguing that the United States should be compensated for securing the vital maritime corridor. He also declared that Washington was reinstating a naval blockade on Iran, a move that further unsettled global energy markets.
In separate remarks, Trump said the United States intended to safeguard the strait and expected other nations benefiting from its security to share the cost. However, he did not explain how the proposed transit fee would be enforced.
Iran swiftly rejected the proposal, insisting the Strait of Hormuz remains under its protection and arguing that Washington has no legal basis to impose charges on vessels using an international shipping lane.
Iranian Foreign Minister Abbas Araqchi described the proposed levy as unacceptable, maintaining that Iran would continue to safeguard the waterway. The country’s Revolutionary Guards also warned that continued US military operations in the Gulf could further disrupt international oil and gas trade.
Meanwhile, Reuters reported that the US Navy-led Joint Maritime Information Centre had announced plans to begin enforcing a maritime blockade on Iran from Tuesday. According to the advisory, the blockade would extend to Iranian ports, oil terminals and coastal waters, with vessels entering or leaving the restricted area potentially subject to interception or seizure.
The advisory clarified that ships travelling through the Strait of Hormuz to destinations outside Iran would still be allowed to transit the waterway.
The US Central Command also confirmed carrying out overnight strikes on an Iranian submarine and a ship maintenance facility, describing the action as retaliation for Iranian attacks on commercial shipping.
Iran, on its part, said it had launched attacks against US military installations across the Gulf, including facilities in Jordan, Bahrain and Kuwait, as well as radar sites in Oman. Bahrain accused Tehran of targeting civilian locations.
Shipping data from MarineTraffic indicated that while some vessels continued to navigate the Strait of Hormuz, overall traffic remained below normal levels as operators monitored the evolving security situation.
The renewed hostilities have also cast doubt on a temporary agreement reached last month under which both countries agreed to reopen the strait and suspend hostilities for 60 days while negotiations continued.
The developments have sparked legal debate over the proposed US transit charge. Under the United Nations Convention on the Law of the Sea, ships are generally entitled to unhindered passage through international straits such as Hormuz, and coastal states are not permitted to impose fees solely for transit.
Although Iran has long argued that it is not bound by some provisions of the convention, analysts say it remains unclear whether the United States can lawfully implement Trump’s proposed cargo levy or whether major shipping companies and oil-exporting nations would comply if it takes effect.
