Crude oil jumped nearly 9 percent Monday to around $83 a barrel after President Trump announced the U.S. was reinstating a naval blockade targeting Iran, escalating tensions that had already spiked over the weekend.
The price move carries real consequences at the pump. Gasoline prices, which sat at $3.87 per gallon Monday morning according to AAA, could edge back toward the $4 mark as crude climbs higher. The national average has risen 7 cents in the past week but remains well below the $4.56 peak hit in May.
Trump laid out his stance in a post on Truth Social, insisting that the Hormuz Strait would remain accessible to international shipping. "The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran," he wrote.
The blockade, Trump explained, would target only Iranian vessels and their customers. All other nations would enjoy "fair and open use of the Strait." The U.S. plans to charge a 20 percent fee on cargo shipped through the waterway to cover security and safety costs.
But reality on the water tells a different story. Ship tracking services including Kpler have documented a sharp drop in vessel traffic through the strait in recent days, wiping out most gains from the earlier thaw that followed a U.S.-Iran memorandum of understanding. Inbound oil tanker movements have declined noticeably, according to research firm S&P Global Energy.
The contradiction between Trump's claims of an open corridor and the vessel traffic data underscores the market's struggle to parse what's actually happening in one of the world's most critical chokepoints. Higher prices across the board suggest traders are betting on sustained disruption, regardless of official messaging about unrestricted passage.
Author James Rodriguez: "Trump's claim of an open strait while simultaneously reimposing a blockade is the kind of doublespeak that markets hate, but higher oil prices suggest investors believe the disruption talk more than the reassurance."
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