Dubai: Crude oil futures rose sharply on Monday after U.S. President Donald Trump stated that the United States would reinstate a naval blockade on Iran in the Strait of Hormuz. The development heightened concerns about potential disruptions to oil shipments from the region.
West Texas Intermediate (WTI) crude for August delivery increased by $6.73, or 9.42 percent, settling at $78.14 per barrel on the New York Mercantile Exchange. Brent crude for September delivery gained $7.29, or 9.59 percent, to settle at $83.30 per barrel on the London ICE Futures Exchange.
The price gains marked the largest one-day percentage increase in recent weeks. Trump’s statement referenced renewed military exchanges and indicated the blockade would cover Iran’s coastline, ports, and oil terminals, with a reported 20 percent fee on cargo transiting the strait.
The Strait of Hormuz serves as a critical passage for a significant portion of global oil trade. Disruptions in the area can affect supplies from several major producers in the Persian Gulf.
Market participants cited the announcement as the primary driver of the rally, with traders adjusting positions in response to elevated geopolitical risks.
The move in oil prices contributed to volatility in broader financial markets. Energy sector shares generally advanced, while concerns emerged over possible impacts on inflation and economic activity from higher energy costs.
This latest development follows a period of relative easing in oil markets after an earlier interim agreement. The situation remains fluid, with potential implications for global energy supply and prices depending on further developments in the region.