Oil Prices Rise After Trump Announces Naval Blockade on Iran
Oil prices jumped about 9% to roughly $83 per barrel on Monday after President Trump announced the US would reinstate a naval blockade on Iran. The move is expected to impact gasoline prices, potentially pushing the national average back toward $4 per gallon.
President Trump claimed on Monday that the US was reinstating a naval blockade on Iran, causing oil prices to surge about 9% to roughly $83 per barrel. The blockade is intended to stop Iran's ships or customers from entering or leaving the Strait of Hormuz, while allowing other countries to use the strait fairly and openly.
The average US price of gasoline was $3.87 per gallon on Monday, up about 7 cents over the past week. However, the price is still far below the $4.56 per gallon reached in May. Trump stated that the US will seek reimbursement at a rate of 20% on all cargo shipped for the costs of providing safety and security in the Strait of Hormuz.
Despite Trump's claim that the Strait of Hormuz is open, vessel tracking services have reported a decline in ships transiting the waterway in recent days. This includes a reduction in inbound oil tankers entering the strait to load, according to the research and consulting firm S&P Global Energy.
Go Deeper
What is the current average US price of gasoline?
The average US price of gasoline was $3.87 per gallon on Monday, up about 7 cents over the past week.
How much did oil prices jump after Trump's announcement?
Oil prices surged about 9% to roughly $83 per barrel after President Trump announced the US would reinstate a naval blockade on Iran.
What is the purpose of the naval blockade on Iran?
The blockade is intended to stop Iran's ships or customers from entering or leaving the Strait of Hormuz, while allowing other countries to use the strait fairly and openly.
How will the US be reimbursed for the costs of the blockade?
The US will seek reimbursement at a rate of 20% on all cargo shipped for the costs of providing safety and security in the Strait of Hormuz.
What is the impact of the blockade on ship traffic in the Strait of Hormuz?
Vessel tracking services have reported a decline in ships transiting the waterway in recent days, including a reduction in inbound oil tankers entering the strait to load.
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