US Re-imposes Maritime Blockade on Iran, Oil Prices Jump to One-Month High

International oil prices climbed to a one-month high on Tuesday, driven by the U.S.'s reimposition of maritime blockades on Iran. This action is expected to restrict crude oil transport through the vital Strait of Hormuz, a chokepoint that previously handled about 20% of global oil supply before the recent conflict.

Brent crude futures rose by $1.43 to settle at $84.73 per barrel, while U.S. West Texas Intermediate (WTI) futures gained $1.20 to close at $79.34 per barrel. Both benchmarks marked their second consecutive day of closing at levels not seen since mid-June.

Analysts at Ritterbusch and Associates noted that escalating U.S.-Iran attacks this week, coupled with the renewed blockade, suggest a continued rise in conflict. "The conflict is likely to continue to escalate," their report stated.

Adding complexity, U.S. President Donald Trump withdrew a proposal to charge a 20% fee for ships escorting through the Strait of Hormuz. He indicated a shift towards seeking investment agreements with Gulf nations as a strategy for managing the conflict with Iran. This announcement initially caused U.S. oil futures to dip briefly.

However, reports later emerged of two United Arab Emirates oil tankers being hit by Iranian missiles, resulting in one death and eight injuries. This incident caused oil prices to rebound, raising market doubts about the effectiveness of a memorandum of understanding signed last month in securing a lasting ceasefire and ending the war that has disrupted energy supplies and fueled inflation fears.

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The conflict is likely to continue to escalate.