Trump gambit normalises Hormuz’s tolled future

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

By George Hay and Yawen Chen

LONDON, July 14 (Reuters Breakingviews) - Oil rose to $86 a barrel after the American president threatened a 20% levy on cargoes transiting the Strait. The US once ruled out such fees entirely. Accepting the principle of tolls makes it easier for Iran to charge its own one, leaving the Hormuz route permanently pricier.

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President Donald Trump said on July 13 that the United States was reinstating a naval blockade on Iran.

He added that the U.S. would be reimbursed 20% on all cargo shipped through the Strait of Hormuz after Tehran claimed it had closed the vital waterway.

"The Hormuz Strait is OPEN, and will remain OPEN, ‌with or without Iran. We are reinstating THE IRANIAN BLOCKADE," Trump said on Truth Social, a social media site.

"The U.S.A... will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World," he said.

German container shipping group Hapag-Lloyd said on July 14 it would be "fundamentally wrong" to levy fees on vessels passing through international waters in the Strait of Hormuz.

The company also said it could not reliably quantify the financial impact of tensions in the Gulf on its business.

Brent crude futures were up 3.3%, at $86 per barrel at 0751 GMT on July 14, while U.S. West Texas Intermediate crude rose 2.8% to $80 a barrel.