Oil Jumps to One-Month High After Trump Moves to Reinstate Iran Sea Blockade

Oil jumped to its highest level in a month after U.S. President Donald Trump moved to reinstate a maritime blockade on Iran.

West Texas Intermediate traded near $78 a barrel on July 13, according to Bloomberg, extending the previous session's 9.4% surge. Brent settled above $83 a barrel.

Trump said he would resume a blockade on Iranian vessels passing through the Strait of Hormuz and impose transit-style fees on all other cargo ships. He said shippers would have to pay 20% of the value of their cargoes, which he estimated would come to about $30 million for a very large crude carrier, or VLCC, loaded with oil.

The U.S. military also carried out airstrikes against Iran for a third straight day on July 13, and the operation may continue for several more days, according to the report.

The market is again focused on the risk of disruptions to Middle East oil supplies. Crude has now recovered most of its roughly 30% decline in the second quarter, rebounding to its highest level in the past month.

Iran exported at least 57 million barrels of oil during the gap between the two U.S. maritime blockades, according to the tally cited in the report. Traders are watching whether the renewed blockade will once again squeeze supplies of Iranian crude.

Jay Hatfield, chief executive officer of Infrastructure Capital Management, said oil would probably trade around $80 a barrel for now. That could change if conditions in the Strait of Hormuz shift. If the waterway returns to normal, prices could quickly fall back into the $60s.

Iran pushed back immediately. Iranian forces attacked U.S. military assets in Kuwait with drones and fired cruise missiles at what it called "hostile vessels," the semi-official Fars News Agency reported.

Iranian Foreign Minister Abbas Araghchi said any agreement with the U.S. had "without a doubt entered a period of crisis" and that Tehran would not comply unless Washington honored its commitments.

He also criticized Trump's transit-fee plan. "Iran has always been the guardian of the Strait of Hormuz and will remain so," he said. "Twenty percent is, of course, too high. We will make it fair."