U.S. to reimpose naval blockade against Iran; Hormuz to remain open for others at 20% levy: Donald Trump

Global financial markets turned cautious on Monday after US President Donald Trump proposed charging a 20% reimbursement on all cargo transiting the Strait of Hormuz, marking a dramatic escalation in Washington's strategy to secure one of the world's busiest energy chokepoints amid an intensifying standoff with Iran following a short-lived ceasefire between the two nations.

The statement came as US military operations expanded in the Gulf and Iran rejected any attempt by Washington to oversee navigation through the Strait, warning that such a move would face "strong resistance" and that countries cooperating with the United States could be considered parties to the conflict.

Oil prices rallied sharply. Following the latest statements from Trump, US West Texas Intermediate (WTI) crude climbed 4.83% to $74.86 a barrel, while Brent crude, the global benchmark, surged 4.84% to $79.69 a barrel.

Traders are closely monitoring the situation amid concerns that any disruption to shipping through the strategic waterway could tighten global crude supplies and increase freight and insurance costs.

The heightened geopolitical uncertainty weighed on global markets too. As of 8:40 pm IST, Dow futures were down 109 points, or 0.21%, while GIFT Nifty slipped 69.5 points, or 0.29%, signalling a weak start for Indian equities. In the US, the Dow Jones Industrial Average ended 85.68 points, or 0.16%, lower, the S&P 500 declined 0.35%, while the Nasdaq Composite fell 229.36 points, or 0.87%, hinting at broad-based weakness in US equities.

Trump pitches US as 'guardian' of the Strait

In a post on social media and later during an interview with Fox News, Trump declared that the Strait of Hormuz "will remain OPEN, with or without Iran", adding that the United States was "reinstating the Iranian blockade" while allowing other countries unrestricted access to the waterway.

He further proposed that Washington become the "Guardian of the Hormuz Strait", saying countries using the route should compensate the United States for securing it.

"We are going to guard it. We're going to get paid for guarding it — a lot of money," Trump said in the interview.

He added that the United States "will be reimbursed, at the rate of 20% on all cargo shipped" to cover the cost of providing security in the region.

The comments followed a statement from US Central Command (CENTCOM), which said American forces had struck a submarine and ship maintenance facility at Bandar Abbas Naval Base using unmanned surface vessels for the first time, aiming to degrade Iran's ability to attack commercial shipping.

Iran rejects US role in Hormuz

Tehran swiftly rejected Trump's proposal.

According to Reuters, Iran's Khatam al-Anbiya Central Headquarters said it would not allow the United States to manage the Strait of Hormuz, adding that any transit organised outside routes designated by Iran and without coordination with its armed forces would face resistance.

The command also warned neighbouring countries that cooperation with Washington over the Strait would be regarded as an act of war against Iran. Meanwhile, a spokesperson for Iran's Revolutionary Guards said the country would continue to "assert our authority and control over the Strait of Hormuz with strength and power."

Separately, Germany, France and the United Kingdom condemned Iran's attacks on commercial shipping and reaffirmed that freedom of navigation is a fundamental principle of international law, while urging all sides to return to negotiations.