GLOBAL oil prices extended their gains on Tuesday as markets reacted to US President Donald Trump's plans to impose shipping fees in the Strait of Hormuz and reinstate a blockade of Iranian ports, raising concerns over the security of global energy supplies.
US West Texas Intermediate (WTI) crude futures for August delivery rose 2.27 per cent to US$79.91 per barrel, while international benchmark Brent crude for September delivery gained 2.14 per cent to US$85.11 per barrel.
The latest advance followed Monday's sharp rally, when Brent crude surged 9.6 per cent after escalating tensions between the United States and Iran reignited concerns over disruptions to one of the world's busiest oil shipping routes.
Trump announced that the United States would impose shipping charges on vessels transiting the Strait of Hormuz, saying cargo would be charged "at the rate of 20% on all cargo shipped" after declaring the United States the "guardian" of the strategic waterway.
In a post on Truth Social, Trump also confirmed that Washington would reinstate its blockade of Iranian ports near the Strait of Hormuz, further intensifying the conflict with Tehran.
US Central Command (CENTCOM) later said the blockade would take effect at 4pm Eastern Time on Tuesday.
Analysts said the measures had significantly increased geopolitical uncertainty in global energy markets.
Investment bank Citi warned that the proposal to impose shipping fees through the Strait of Hormuz materially increased the risk of further military escalation in the region.
"The possibility that the Iranian regime walks away from the MoU until after the mid-term US elections has also risen, a scenario which would most likely see higher for longer oil prices," the bank said in a research note published on Tuesday.
Before the conflict escalated earlier this year, around one-fifth of global oil supplies passed through the Strait of Hormuz each day, making it one of the world's most strategically important maritime chokepoints.
Shipping volumes fell sharply after Iran began targeting vessels in the waterway in early March, although traffic had started to recover following an interim agreement between Washington and Tehran before the latest escalation.
Meanwhile, the US dollar index edged higher to around 101 on Monday as investors balanced geopolitical risks in the Middle East against expectations for US monetary policy.
Currency markets are also awaiting the release of the latest US Consumer Price Index (CPI) and Producer Price Index (PPI) data later this week for further indications of inflationary pressures, while Federal Reserve Chair David Warsh's congressional testimony is expected to provide additional guidance on the central bank's policy outlook.
Market pricing currently indicates expectations of at least one US interest rate increase before the end of the year, with traders assigning roughly a 71 per cent probability of a rate hike in September.
The dollar weakened against the euro but strengthened against the Japanese yen, with the Japanese currency coming under pressure following reports that Japan has no immediate plans to adjust the asset allocation of its state pension funds.
Analysts said continued volatility in oil markets is likely to depend on developments in the US-Iran conflict, the security of shipping through the Strait of Hormuz and upcoming US economic data that could influence the Federal Reserve's next policy decisions. - July 14, 2026
