Trump Reinstates Iran Port Blockade as Oil Prices Surge

President Donald Trump announced the reinstatement of a U.S. naval blockade on Iranian ports following a weekend of heavy airstrikes exchanged between the United States and Iran. The conflict escalated further as Iran launched attacks on Gulf Arab states, including Bahrain, Kuwait, Qatar, Jordan, and Oman. While Iran claimed it closed the Strait of Hormuz "until further notice," the U.S. rejected this assertion, and Trump maintained that the waterway remains open.

The geopolitical instability triggered a sharp rise in crude oil prices, with West Texas Intermediate crude rising 9.62 percent to $78.28 per barrel. This surge caused commodity-linked currencies—such as the Australian, New Zealand, and Canadian dollars—to strengthen, while Asian oil refiners in Japan, the Philippines, and Pakistan began diversifying imports away from the Middle East toward U.S. crude spot cargoes.

Global financial markets reacted with volatility. On July 13, the Nikkei 225 fell 1.92 percent to 67,242.73 as investors feared inflation driven by energy disruptions. U.S. markets also declined, with the Nasdaq and S&P 500 leading losses due to drops in semiconductor stocks. Investors are now awaiting inflation data from the Labor Department and testimony from Federal Reserve Chair Kevin Warsh regarding the inflationary impacts of the conflict.