Texas oil rises 3.25% after Iran announces Strait of Hormuz closure

Texas Intermediate (WTI) crude oil prices surged by 3.25% to $73.73 a barrel on Monday, driven by fears stemming from Iran's announcement to close the Strait of Hormuz indefinitely. The benchmark US oil futures for August delivery climbed $2.32 from Friday's closing price.

The oil market is closely monitoring the escalating tensions between the United States and Iran. Iran's Revolutionary Guard declared on Sunday that the strategic waterway would be shut "until further notice" and issued a stern warning against any foreign attempts to open an "illegal route" in the region, promising a forceful response.

However, the situation remains contested. Shortly after Iran's announcement, U.S. President Donald Trump asserted that the strait remains open for commercial traffic. The U.S. Central Command echoed this, insisting via a message on X that the passage is accessible "to all vessels" intending to transit legally. "Iran does not control the strait. Traffic flows," the military command stated.

President Trump further indicated that U.S. forces would assert control over the strait, suggesting the U.S. would become its "guardian." In a phone interview with Fox News, he stated, "We are going to hit them very hard (Iran), and we are going to keep the strait safe, and we are probably going to manage it. We will become the guardian of the strait... And we should be compensated for that."