Oil jumps as Trump claims new Hormuz blockade on Iran
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Oil prices surged about 9% Monday to roughly $83 per barrel after President Trump claimed the U.S. was reinstating a naval blockade on Iran, adding to gains already driven by renewed hostilities over the weekend.
Why it matters: Higher oil prices typically feed into higher gasoline prices, potentially pushing the national average back toward $4 per gallon.
Context: The average U.S. price was $3.87 per gallon Monday morning, per AAA data, up about 7 cents over the past week but far below the $4.56 per gallon reached in May.
Catch up quick: "The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran," Trump wrote on his Truth Social account Monday.
- "We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran's ships or customers from entering or leaving. All other countries will have fair and open use of the Strait," Trump said.
- The U.S. will seek reimbursement "at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security," he added.
Reality check: Despite Trump's claim of an open strait, vessel tracking services like Kpler have reported a steep decline in ships transiting the waterway in recent days, reversing much of the revival that followed the signing of the U.S.-Iran memorandum of understanding.
- This includes a reduction of inbound oil tankers entering the Strait to load, per the research and consulting firm S&P Global Energy.
