The price of oil jumped more than 9% after President Donald Trump declared on social media Monday that the U.S. would resume its blockade on Iran and be “reimbursed” for helping ships transit the Strait of Hormuz.
U.S. crude oil closed higher by 9.4% at $78.14 per barrel, while international Brent crude oil jumped 9.6% to $83.30 per barrel. Both benchmarks are now at their highest prices since June 15, and today marks Brent’s largest single-day jump since May 2020.
The recent increase in oil prices has halted declines in U.S. gasoline prices, as well.
Patrick De Haan, analyst at GasBuddy, said he expects “the national average price of gasoline to reach $4 per gallon in the next 7-10 days, if not sooner,” with retailers starting to pass along increases “in the next 24-48 hours.”
Stocks also fell, with the S&P 500 closing down 0.8% and the Dow ending lower by 138 points. The Nasdaq, which faced heavier selling due to tumbling tech stocks, wrapped up the trading day by falling 1.6%.
Trump said the Hormuz reimbursement would be “at the rate of 20% on all cargo shipped.” It was not immediately clear how that would work. Energy and shipping companies have loudly rejected a similar idea from Iran, under which ships would pay a toll in order to pass through the critical waterway.
