President Donald Trump announced a major escalation in U.S. pressure on Iran by reinstating a naval blockade and imposing a 20% fee on all cargo transiting the Strait of Hormuz. The decision, communicated on Monday, marks the latest in a series of military exchanges and comes despite a fragile June ceasefire aimed at reopening the waterway for negotiations over Iran’s nuclear program.
Trump said the U.S. would act as the “guardian” of the strait, a critical chokepoint that normally carries about one-fifth of global oil shipments. “The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran,” Trump posted on Truth Social, adding that only Iranian ships or their customers would be blocked, while all other nations would have fair use. He justified the 20% cargo fee as reimbursement for the costs of providing security in the volatile region.
The announcement followed fresh U.S. strikes on Iranian air-defence systems, missile and drone sites, and other military infrastructure. Iran swiftly rejected the proposal, with its Khatam al-Anbiya Central Headquarters warning that any disruption or insecurity caused by the U.S. military outside Iranian-designated routes would be met with force. Iran also cautioned neighboring countries against providing logistical support to U.S. operations, saying such cooperation would be viewed as an act of war.
Financial markets reacted sharply. Brent crude briefly jumped 5% to nearly $80 a barrel, while West Texas Intermediate also surged around 5%. Equities weakened, with the Nasdaq 100 and S&P 500 falling as investors priced in higher energy costs and rising geopolitical risk. Shipping activity through the strait slowed notably, with reports of few vessels using the U.S.-administered route and some turning back.
Legal experts raised questions about the fee’s compatibility with international maritime law, which generally allows transit passage through international straits. Enforcement details remain unclear, with the White House stating only that implementation would begin immediately.
