Arab Finance: Oil prices jumped on Tuesday, July 14th, after US President Donald Trump announced plans to impose shipping fees on vessels transiting the Strait of Hormuz and reinstate a blockade of Iranian ports.
The announcement raised concerns over potential disruptions to global crude supplies and one of the world's most critical energy shipping routes.
By 9:23 am Cairo time, US West Texas Intermediate (WTI) crude futures for August delivery gained 2.10% to $79.78 per barrel, while international benchmark Brent crude futures for September delivery advanced 2.05% to $85.01 per barrel.
After depicting the US as the “guardian” of the Strait of Hormuz, Trump said the US will levy fees on ships transiting the route, charging “at the rate of 20% on all cargo shipped”.
Meanwhile, Citi issued a statement warning that the measure could raise the risk of further military escalation.
“The possibility that the Iranian regime walks away from the MoU until after the mid-term US elections has also risen, a scenario which would most likely see higher for longer oil prices,” the bank noted in a report published on Tuesday.
Iran and the US signed a peace deal in June, but Trump terminated the truce following an escalation surrounding the strategic Strait of Hormuz.
