Crude oil prices surged past the $80 per barrel mark on Monday as mounting tensions between the United States and Iran reignited concerns over the security of the Strait of Hormuz, a vital route for global energy exports.
The latest spike followed a series of military exchanges between Washington and Tehran, alongside a controversial proposal by US President Donald Trump to impose a 20 per cent fee on cargoes moving through the strategic waterway.
Brent crude, the international benchmark, climbed sharply as traders reacted to the possibility of disruptions to oil shipments from the Gulf, which accounts for a significant share of global crude exports.
Trump, in a statement posted on his Truth Social platform, said the United States should be compensated for the role it plays in safeguarding navigation through the Strait of Hormuz.
According to him, Washington would continue to ensure access to the waterway but expected countries benefiting from the security arrangement to contribute financially.
He also announced the reintroduction of what he described as a blockade against Iran, signalling a further deterioration in relations between the two countries.
"The Hormuz Strait is open and will remain open, with or without Iran," Trump declared, adding that implementation of the proposed cargo charge would begin immediately.
The proposal represents a dramatic escalation in the economic pressure campaign against Tehran and comes amid renewed military confrontations in the Gulf region.
During a television interview earlier in the day, Trump suggested the United States could assume responsibility for protecting the shipping lane, arguing that nations dependent on the route should share the costs of maintaining security.
The Strait of Hormuz is regarded as one of the world's most important energy chokepoints, serving as the principal export corridor for oil and liquefied natural gas from Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates and Iran.
Analysts estimate that about one-fifth of global oil consumption passes through the narrow channel every day.
Iran reacted swiftly to the US proposal, dismissing Washington's claim to authority over the waterway.
Iranian Foreign Minister Abbas Araqchi insisted that Tehran had historically safeguarded the strait and maintained that no country had the right to impose charges on vessels transiting an international shipping route.
Iran's Revolutionary Guards also warned that continued American military operations in the region could further destabilise maritime trade and energy markets.
The confrontation deepened after reports emerged that the US military would begin enforcing restrictions targeting Iranian ports, oil facilities and coastal areas.
Maritime advisories indicated that vessels suspected of engaging with Iranian ports could face interception or diversion, although commercial traffic passing through the Strait of Hormuz to non-Iranian destinations would still be permitted.
Meanwhile, the United States confirmed strikes on Iranian military assets, including naval infrastructure, describing the actions as a response to attacks on commercial shipping in the Gulf.
Iran, for its part, claimed it had launched retaliatory attacks against US-linked military facilities across the region.
The renewed hostilities have raised fresh doubts about efforts to stabilise relations between the two countries following a temporary understanding reached last month to reduce tensions and guarantee safe navigation through the strait.
Shipping operators are already reacting cautiously, with vessel-tracking data showing reduced traffic levels through the strategic corridor.
Beyond its impact on oil prices, Trump's proposal has also triggered debate over international maritime law.
Legal experts note that the United Nations Convention on the Law of the Sea guarantees the right of transit passage through international straits, raising questions about the legality of imposing charges on vessels merely for using the route.
While the United States has not yet outlined how the proposed levy would be implemented, uncertainty surrounding the policy has added to concerns within global energy markets.
With geopolitical tensions rising and the future of Gulf shipping routes once again under scrutiny, traders and governments alike are bracing for further volatility in oil prices and international trade.
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