On Tuesday, U.S. West Texas Intermediate futures for August delivery increased by 2.27% to $79.91 per barrel, while Brent crude futures for September delivery rose 2.14% to $85.11. This price increase follows Trump's declaration that the U.S. will impose a 20% fee on all cargo transiting the Strait of Hormuz, a critical oil shipping route. Additionally, the U.S.
Central Command confirmed that the blockade on Iranian ports would commence at 4 p.m. ET on the same day. Analysts at Citi highlighted that these developments significantly heighten the risk of military escalation in the region, which could lead to sustained higher oil prices. The Strait of Hormuz is crucial, with approximately one-fifth of global oil supplies passing through it.
Following recent tensions, including U.S. and Israeli strikes on Iran, shipping traffic had declined but was beginning to recover due to an interim agreement between Washington and Tehran. However, the renewed threats from the U.S. could jeopardize this recovery and further impact oil prices