US Blockade Part 2: WTI Climbs above $80 as Trump Declares US “Guardian of Hormuz” 

US Blockade Part 2: WTI Climbs above $80 as Trump Declares US “Guardian of Hormuz”

This time last week here we noted the re-emergence of geopolitical tensions in the Strait of Hormuz, after eight vessels approaching the strait on the Omani side were turned back or altered course as Iran began to reassert its leverage over the waterway.

In what is probably no coincidence, this unfolded on the same weekend that Iran held a major public funeral procession and mourning ceremonies for the late Supreme Leader Ayatollah Ali Khamenei. Millions gathered in Tehran for the multi-day event, which featured strong chants of “Death to America” and “Death to Israel,” along with public calls for revenge.

This display of national unity and defiance has since been followed by reports of more hawkish behaviour, with Iranian forces attacking or targeting approximately half a dozen ships in the region.

The situation escalated further overnight after President Trump announced that the United States would reinstate its blockade of Iranian shipping in the Gulf and declare itself the “Guardian of the Hormuz Strait,” complete with a proposed 20% fee on all cargo passing through the waterway.

Trump’s move (barring a late TACO or late diplomatic efforts to defuse the latest escalation) has effectively ended the fragile interim understanding signed back in mid-June and marks a return to the dynamics seen during the previous US blockade (April to mid-June), when WTI traded in a range mostly above $85.00 and below $105.00.

These events have effectively consigned the recent “Strait of Hormuz back to normal” narrative to the graveyard — much like the $200 oil narrative that briefly took hold in the early days of the conflict. This realisation has pushed crude oil above the $80 handle this morning for the first time in four weeks.

How much higher crude oil goes during “US Blockade Part 2” will depend on several key factors, including those outlined below, and again on whether a late TACO or diplomacy arrives to defuse the latest escalation.

• Omani Transit Success: The US in coming days will likely look to build on its past success in escorting ships via the Omani side of the strait.
• The Houthi Risk: Markets will be watching whether the Houthis are drawn deeper into the conflict, potentially targeting tankers in the Bab al-Mandeb strait and creating a second major chokepoint disruption. 
• Tehran’s Response: This may involve striking energy infrastructure and shipping elsewhere in the Gulf, to broaden the conflict which could encourage further US strikes or more rapid de-escalation.  
• Overland Bypass Capacity: On the mitigating side, expectations around the current expansions and development of overland routes bypassing the strait — which could eventually deliver close to 10 million barrels per day — should help limit fears of a total supply collapse. 

In the short term, all eyes will now be on how the US, and its allies manage to get ships moving through the Omani crossing again while enforcing the blockade on the Iranian route, along with efforts to keep the Houthis on the sidelines. 

Crude Oil Technical Analysis

Crude oil has rallied around 20% from the early June low of $67.04 to today’s high of $80.42, edging closer to the price zone where it traded during the first US blockade.

As long as WTI holds above support in the mid-$70s — last week’s high of $76.08 and the 200-day moving average near $74.29 — the risks appear to be for a test of the bottom of the range seen during Blockade Part 1 in the mid-$80s. 

Crude Oil Chart 

The figures stated are as of July 14^h 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.