Trump Wants a 20% Cut of All Oil Through Hormuz. Markets Are Not Thrilled.

Editor's note: The legality of the proposed toll under international law is disputed. It is unclear whether the US military can or will enforce the 20% charge. Oil price figures are intraday and subject to revision.

Trump just announced the US will impose a 20% charge on all cargo transiting the Strait of Hormuz, declaring himself "THE GUARDIAN OF THE HORMUZ STRAIT" on Truth Social. Brent crude immediately jumped as much as 5% to $79.59 a barrel (Guardian, Jul 13). If you're wondering whether this affects you — one-fifth of the world's oil passes through that waterway. Congratulations, you're already paying for it.

Trump framed the toll as compensation for US military operations. "We're going to keep the strait, and we'll probably run it," he told Fox News (CNBC, Jul 13). In his Truth Social post, he added: "as a matter of FAIRNESS, [the U.S.] will be reimbursed, at the rate of 20% on all cargo shipped" (The Hill, Jul 13).

Market shock

Prices remain roughly 9% above pre-war February levels. Citi warned the proposal "materially raises the risk of further military escalation" and that the possibility of Iran walking away from the June peace deal has "also risen" — a scenario that would likely mean higher-for-longer oil prices (CNBC, Jul 14). Daily ship traffic through Hormuz has already dropped to the lowest level in a month, with only 14 ships braving the passage on July 12, according to maritime data firm Kpler (NYT, Jul 12).

The legal problem

Here's the contradiction: the Washington Post noted the toll contradicts official US assertions that fees on Hormuz shipping would violate international law (Washington Post, Jul 13). Secretary of State Rubio had told Gulf allies in late June that the US would not support Iran charging fees for ships passing through the strait. Now Trump is proposing exactly that — for the US.

Iran's military command responded that it would not allow the US to "interfere in the management" of the strait (BBC). The IRGC launched retaliatory strikes on US military facilities in Bahrain, Jordan, Kuwait, and Oman. The blockade reinstatement directly unravels a key provision of the June 17 Memorandum of Understanding, under which the US and Iran agreed to end the war and reopen the strait (Axios, Jul 13).

Whether the 20% toll can be enforced — or survives legal challenge — remains uncertain. A US defense official claimed the southern route through Oman's waters remains open, with at least 20 ships transiting in coordination with the US. What is clear is that a policy designed as economic leverage has already moved markets and risks entrenching a cycle of escalation that the June ceasefire was meant to end. If you hold energy stocks, this is your volatility. If you buy gas, this is your bill.