Oil Hits $84 as Trump Kills Iran Ceasefire, Navy Blockade Returns
Tensions between the U.S. and Iran have erupted into open confrontation, with President Donald Trump declaring the ceasefire over and the U.S. Navy reinstating a naval blockade on Iranian ports, sending oil prices to a one-month high.
The U.S. military launched a new wave of airstrikes against Iran and reinstated a naval blockade, escalating pressure on the Iranian government [196041]. The U.S. Central Command (CENTCOM) announced the blockade resumed at 4:00 p.m. Eastern Time, targeting all vessels heading to Iranian ports and coastal areas [196279]. This move comes in response to what the Pentagon describes as ongoing Iranian attacks on commercial shipping in the Strait of Hormuz [196279].
President Donald Trump declared the end of the U.S.-Iran ceasefire, citing repeated outbreaks of fighting in the region [196305]. The announcement came before the restart of the blockade of the Strait of Hormuz, a key waterway for global oil shipments [196305].
Oil prices surged nearly two percent on Tuesday, reaching their highest level in a month. Brent crude futures settled at $84.73 per barrel, up $1.43 [196277]. U.S. West Texas Intermediate crude also rose sharply [196277]. The Strait of Hormuz is a narrow waterway connecting the Persian Gulf to the open ocean, and about one-fifth of the world’s oil passes through it daily [196277]. The blockade disrupts tanker traffic, tightening global supply and driving prices higher [196277].
Iran’s Armed Forces announced that any US attempt to intervene in the Strait of Hormuz threatens regional security and maritime trade, stating it will not permit such action [196158]. The United States and Iran each declared Monday that they control the Strait of Hormuz, following a series of attacks across the Middle East over the weekend [194775]. The latest violence began Sunday when Iran struck a container ship in the strait, off the coast of Oman [194775].
The United States insists the Strait of Hormuz remains open for international shipping, even as it exchanges military strikes with Iran [194702]. Iranian forces earlier claimed the strategic waterway was closed and launched wide-ranging attacks against US allies and military bases in the region [194702]. The Strait of Hormuz carries about one-fifth of the world’s oil supply, and its closure could disrupt global energy markets and shipping routes [194702].
Analysts warn that $4 per gallon could return soon for U.S. drivers if conflict disrupts the flow of oil through the strait [196329]. The U.S. has demanded that Iran halt all attacks in the Strait of Hormuz, with a US official stating, "We expect the Iranians to say ... that every channel in the strait will be open and that it will be toll-free" [193396].