Authors: Li Dan, Li Jia
The situation between the US and Iran has escalated abruptly, with transit risks through the Strait of Hormuz sharply rising, leading to a robust rebound in international crude oil futures.
According to Xinhua News Agency, US President Trump stated on Monday the 13th that he is restoring a maritime blockade on Iran. According to CCTV News, Trump posted on his social media platform on Monday, saying the Strait of Hormuz is currently open and will remain open regardless of Iran's involvement. The US will reinstate "blockade measures against Iran," targeting only Iranian vessels or their clients, restricting their access to the strait, while all other countries can use the strait fairly and openly. He also stated that the US will impose a 20% fee on all goods transported through here, with the relevant procedures and deployment to commence immediately.
In his social media post, Trump framed this fee as "compensation" for the US acting as the guardian of the strait. He wrote: "From now on, the United States will be regarded as the 'Guardian of the Strait of Hormuz'; as the guardian, and in the spirit of 'fairness,' the US will impose a 20% fee on all transported goods to compensate for the necessary expenditures required to maintain the security and safety of this turbulent region of the world."
After Trump's post during early US stock market hours on Monday, international crude oil prices rose further, with WTI crude breaking above $75, expanding its intraday gain to 5%, and Brent crude approaching the $80 mark, also up nearly 5%; the US Dollar Index and Treasury yields rose in tandem, the S&P 500 extended its decline to 0.5%, while spot gold plummeted nearly 3%.
During the US stock market's lunch hour, the US Central Command confirmed that US forces would begin the maritime blockade on Iran at 4:00 PM EST on Tuesday, July 14, which is 4:00 AM Beijing time on Wednesday. International crude oil gains expanded to nearly 10%. Iranian Foreign Minister Araghchi stated that Trump's proposed 20% fee for the Strait of Hormuz was "too much" and added that Iran has always been the guardian of the Strait of Hormuz.
During the US stock market's late trading hours, according to Iranian media Tasnim, explosions were heard on Iran's Larak Island, located in the Strait of Hormuz, and explosions were also reported in the southern Iranian ports of Bandar Abbas and Konarak. Subsequently, CCTV reported that on the evening of the 13th local time, four explosions were heard east of Bandar Abbas port. After the US market closed, CCTV reported at around 2:00 AM local time on the 14th that three more explosions were heard in Bandar Abbas port. Iranian authorities have not confirmed the nature of the explosions.
During late US trading, after the news about explosions in the mentioned Iranian areas was released, international crude oil maintained gains of around 9%. After the US market closed on Monday, Trump stated that the US would deliver "heavy blows" to Iran tonight and tomorrow. Crude oil remained high, with Brent crude up over 10% compared to Friday's close.
Later, Trump claimed that he believed an Iran deal might be reached. He said, "I want 'compensation' for the Strait of Hormuz. The US is providing protection for shipping in the Strait of Hormuz and will receive compensation from countries that have benefited from US assistance."
After the US market closed on Monday, according to Xinhua citing Iran's Fars News Agency on Monday the 13th, a US MQ-1 drone was shot down by Iran's Islamic Revolutionary Guard Corps (IRGC) air defense system late that night over the Strait of Hormuz. Earlier on Monday, the US Central Command revealed on social media that US forces had struck a submarine and ship repair facility at Iran's Bandar Abbas naval base on Sunday, marking the first combat use of armed unmanned surface vessels by the US military.
Citing a post from the US Central Command, CCTV reported that under Trump's directive, US forces began a third consecutive night of airstrikes on Iran starting at 4:45 PM EST on Monday. The post also stated that the operations would continue to inflict heavy costs on Iran's armed forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz.
US Military to Begin Maritime Blockade on Iran Starting Tuesday, US/Europe Time
The United Nations' International Maritime Organization (IMO) stated after Trump's post that it opposes charging fees for ships passing through international sea lanes but would wait for more details. During the US stock market's lunch hour, according to CCTV, the Joint Maritime Information Center, overseen by the US Navy, indicated that US forces will begin enforcing a maritime blockade on all Iranian ports and coastal areas starting at 20:00 GMT on July 14 (4:00 AM Beijing time on the 15th).
The blockade applies to all vessels, regardless of their flag. The blockade area covers the entire coastline of Iran, including but not limited to Iranian ports and oil terminals. The blockade operation will not hinder the transit passage of neutral vessels through the Strait of Hormuz to or from non-Iranian destinations. Humanitarian shipments will be permitted passage but subject to inspection.
After the news of the US maritime blockade during the US lunch hour, oil price gains continued to expand. WTI and Brent crude rose above $78 and $83 respectively, with intraday gains reaching 9.86% and 9.9%, approaching 10%.
Although Trump said the fee plan would begin formulation and implementation immediately, the White House did not immediately provide more details about the proposal, including how it would be enforced or whether communication had occurred with US allies. Comments suggest that Trump's remarks have intensified the dispute between the US and Iran over whether this crucial shipping corridor remains open to traffic.
Previously, according to Xinhua citing Iranian media reports on the 13th, a spokesperson for Iran's Armed Forces General Staff's Khatam al-Anbiya Central Headquarters stated on that day that they would never allow the US to interfere in the management of the Strait of Hormuz.
The spokesperson said that the Iranian armed forces would respond forcefully to any unauthorized entry by US forces into designated sea lanes or interference with the passage of merchant ships and oil tankers. "The recent actions of Iran's Islamic Revolutionary Guard Corps and the Iranian Islamic Republic Army are clear proof."
Earlier on Monday, Trump said in a phone interview with Fox News Channel that the US plans to control the Strait of Hormuz and should be compensated for "guarding" this vital waterway. He said, "We've been guarding that strait for 50 years and have never gotten a penny. We want to be compensated because we're putting our people in harm's way."
Iran Calls Southern Route in Strait of Hormuz 'Unsafe'
Additionally, according to Xinhua, the Iranian embassy in the UK stated on social media on the 13th that the southern route in the Strait of Hormuz is "unsafe, unreliable, and prone to accidents."
The Iranian embassy in the UK said that in compliance with the Islamabad Memorandum of Understanding, Iran established a temporary maritime security corridor. This corridor has no technical or military obstacles and has been notified to the IMO. However, "the US is directing vessels towards a dangerous southern parallel route. This route is not only legally questionable but also unsafe, unreliable, and prone to accidents."
The Iranian embassy said that US "acts of military aggression," such as attacking Iranian ports, have made the Strait of Hormuz a highly tense and high-risk area.
After the US-Iran understanding was reached, two traffic routes formed in the strait: the northern route controlled by Iran and the southern route closer to Oman's side, where US forces provide navigation assistance.
The Iranian IRGC Navy announced early Sunday morning local time on the 12th that, due to the unsafe situation caused by illegal foreign interference, the Strait of Hormuz is closed as of now until further notice and until the US ceases interference in the region. The US Central Command posted on social media on Sunday morning Eastern Time, stating that "transit continues" in the Strait of Hormuz. Iran does not control the strait.
International Maritime Organization: Opposes Toll Charges for Transit Through Straits Used for International Navigation
After Trump's post, a spokesperson for the International Maritime Organization (IMO) said: "We have noted the remarks and are awaiting further details."
The spokesperson stated: "Our position on fees is clear and consistent—the IMO firmly opposes the imposition of charges for transit through straits used for international navigation. Mandatory transit fees levied solely for passing through a strait are legally untenable."
Media noted that shipping industry officials expressed concern about Trump's latest move regarding fees, saying their assessment is that such measures would violate international law.
One industry official questioned Trump's remarks: "How exactly will this make navigation safer? And what kind of guarantee will it provide?"
Trump Has Notified Congress of Resumption of Hostilities with Iran
According to CCTV citing US reports on Monday the 13th, Trump has formally notified Congress that hostilities with Iran have resumed. Trump wrote in a letter to congressional leaders dated the 10th that US forces conducted a "defensive strike" on targets within Iran on the 7th.
It is reported that this letter has reignited the dispute between Congress and the White House. Although both houses of Congress previously voted to require the President to end the war or seek approval to continue actions, the White House insists that Trump is acting within his constitutional powers as Commander-in-Chief.
