The price of crude oil continued to rise Tuesday, with international benchmark Brent crude oil jumping as high as $87 per barrel, the first time since June it has traded at that price.
U.S. crude oil also climbed as high as $81 per barrel.
Prices pulled back slightly after President Donald Trump announced on social media that he was dropping a proposed Strait of Hormuz “reimbursement fee,” which had been widely viewed as a breach of international maritime law.
U.S. crude oil closed higher by 1.5%, at $79.34, while Brent ended the day up 1.7%, at $84.32.
Since trading opened Sunday night, both benchmarks have risen by more than 10%. Since the start of the year, oil prices are up about 40%.
After Trump proposed the toll Monday, the International Maritime Organization said there was “no legal basis” for it. Hapag-Lloyd, one of the world’s largest shipping companies, said, “It would be fundamentally wrong to charge fees for passage through international waters.”
The U.S. military is reimposing a blockade on Iranian ports and ships in the Strait of Hormuz. It is set to go into effect at 4 p.m. ET. Renewed attacks between U.S. and Iranian forces have also rattled oil markets.
“U.S. forces successfully struck military targets across Iran including Bushehr, Chah Bahar, Jask, Konarak, Abu Musa, and Bandar Abbas to further degrade Iran’s ability to attack commercial shipping,” the U.S. military said Monday night in a statement on X.
The renewed blockade has set off a new wave of concerns in markets.
“The return of the U.S. blockade is much more impactful for markets than the previous suspension of the sanction waiver on Iranian oil,” ING commodities analysts wrote in a note Tuesday.
“The Memorandum of Understanding is starting to look well and truly dead,” they added, referring to a deal Trump and the Iranians signed in mid-June, which officials had said would end the combat phase of the conflict.
Meanwhile, commercial shipping traffic in the strait continues to fall in response to the renewed fighting and the breakdown in secure passage for vessels.
On Friday, 19 ships transited the critical waterway, a figure that rose to 24 on Saturday. By Monday, the number had fallen by more than half to just 10 vessels, according to data from Kpler.
“The U.S. continues to say that the Strait of Hormuz is open,” the ING analysts wrote. “But given the growing risk of attack, these comments will offer little comfort to ships. This is reflected in ship tracking data, which shows that vessel crossings yesterday fell to just a trickle.”