Brent crude jumps 1.7% as US naval blockade, Iran tanker attacks rattle oil markets

Tensions around the Strait of Hormuz reverted to levels seen before the end-of-war MOU was signed, as the United States began a naval blockade against Iran, sending international oil prices higher on Tuesday (local time).

Brent crude futures for September delivery closed at $84.73 a barrel on the ICE Futures Exchange, up 1.7% from the previous session. West Texas Intermediate crude for August delivery settled at $79.34 a barrel on the New York Mercantile Exchange, a gain of 1.5%.

Adding to the upward pressure, the UAE's Ministry of National Defense announced that two oil tankers attempting to transit the Strait of Hormuz through Omani territorial waters had come under Iranian attack. Iran has been targeting vessels trying to use the Omani side of the strait since July 7, and the United States has continued airstrikes against Iran through Tuesday. Washington also launched a naval blockade against Iran starting at 4 p.m. Eastern time Tuesday — 5 a.m. Wednesday Korean Standard Time — aimed at halting Iranian crude exports.

At least President Donald Trump reversed within a day his Monday announcement of a plan to impose a 20% transit fee on ships passing through the Strait of Hormuz, but oil markets remain rattled by the escalating confrontation between the United States and Iran over control of the waterway.