Oil Rises, Trump Cancels Hormuz Tariffs
Oil prices rose in trading on Tuesday (July 14th) after the United States launched another airstrike on Iran and imposed a naval blockade on the country's ports and coastal areas. However, price gains were tempered after President Donald Trump canceled plans for a 20% levy on ships passing through the Strait of Hormuz.
West Texas Intermediate crude rose 1.5% to close at US$79.34 per barrel. Meanwhile, Brent, the international oil benchmark, rose 1.72% to US$84.73 per barrel.
The US military launched another attack on Iran on Tuesday, before officially imposing a blockade on Iranian ports and coastal areas at 4:00 p.m. New York time. CENTCOM stated that this action was taken amid escalating tensions between Washington and Tehran over the strategic energy route.
Meanwhile, Trump withdrew his demand that ships pay a 20% fee on their cargo to pass through the Strait of Hormuz under US military protection. In return, Trump said Gulf states would invest in the United States as a form of reimbursement.
This decision came after the shipping industry strongly rejected the proposed levies. The International Maritime Organization, a UN agency, also stated that mandatory levies in international straits like Hormuz are contrary to international law.
As a result, oil prices remain potentially volatile due to the ongoing US blockade of Iran. However, the cancellation of the 20% tariffs has somewhat eased concerns about additional costs for global energy shipping. If the attacks continue and shipping flows are disrupted, oil prices could remain high, but if the Hormuz route remains smooth, some risk premiums could begin to subside.
Source: Newsmaker.id
