Global Oil Supply Routes

14 July 2026 — Both powers claim Hormuz: Iran declares it closed; the US drops its 20% toll but tightens a full Iran blockade

The US–Iran conflict has escalated sharply since the July ceasefire collapsed. Over the weekend Iran’s IRGC declared the Strait of Hormuz closed “until further notice” — after its forces struck the Cyprus-flagged container ship GFS Galaxy (engine-room fire, crew evacuated to a lifeboat, one crew member missing; CENTCOM). The US answered with further rounds of strikes, the latest on Sunday using one-way attack sea drones for the first time, and Iran retaliated across Kuwait, Jordan, Qatar, Bahrain and Oman — including the first strike on Gulf oil infrastructure in weeks, a Kuwaiti drilling facility. Oil jumped at Monday’s open, Brent trading above $79 and WTI near $74; by Tuesday Brent had pushed above $85, a four-week high, as the war premium returned in force.

On Monday the US hardened its claim over the strait: in a Truth Social post President Trump declared Hormuz “OPEN… with or without Iran,” reinstated a US blockade of Iranian ships and customers, styled the United States the “Guardian of the Hormuz Strait,” and proposed a 20% fee on all cargo transiting the waterway, the process to “begin immediately.” Iran’s Persian Gulf Strait Authority countered that passage was “currently unfeasible” and suspended transit permits. Both powers now assert a right to control — and charge for — the chokepoint, days after the IMO Council ruled that transit through international straits may not be tolled. On Tuesday, after backlash from shippers and the IMO ruling, Trump abandoned the 20% fee — replacing it with a push for Gulf trade and investment deals — while keeping a full blockade on Iran-linked shipping (vessels to or from Iranian ports, or carrying Iranian cargo), which CENTCOM began enforcing that afternoon.

Iranian officials say a US projectile hit the perimeter area of the Bushehr nuclear power plant, and Reuters has carried the perimeter claim — but there is no independent confirmation that the reactor itself was hit. Earlier IAEA and Reuters reporting on previous Bushehr incidents found no reactor damage or radiological release; no fresh IAEA confirmation has yet been seen for this latest strike.

Reuters ship-tracking found at least four oil and gas tankers reversed course near the strait; others continued to transit. The strait’s status is now openly contested — Iran declares it closed while the US and CENTCOM insist it stays open to lawful transit, and the JMIC says the Oman-coordinated southern lane remains available. The US Navy-led Joint Maritime Information Center has raised the transit threat to “severe” — up from “substantial,” its highest since mid-June — and the IMO Secretary-General has urged shipowners not to expose crews to unnecessary danger by transiting while safety cannot be assured. Brent spiked about 6% to near $80 as the fighting resumed, round-tripped to about $76 by Friday, then jumped back above $79 at Monday’s open and above $85 by Tuesday.

A fresh JMIC advisory (013-26, 10 July) keeps the threat level at “severe” but stresses the strait stays open: the southern transit route has been expanded and remains available to all traffic, coordination with NAVCENT’s NCAGS is offered but not mandatory, and — pointedly — “there is no controlling authority regulating passage or fee required for any route.” US NAVCENT added that “no nation has the authority to close or control the Strait of Hormuz,” with US forces prepared to defend freedom of navigation. Mariners are warned of a mine-danger area in the traditional traffic-separation scheme and to expect VHF hailing from naval forces.

War-risk insurance underlines the caution. Marsh, the world’s largest marine broker, says premiums to transit Hormuz now run 2–6% of a vessel’s value — up from a fraction of a percent before the war, having peaked near 10% at the height of the fighting (large no-claim discounts often trim the headline rate). Brokers report fewer requests for quotes since the ceasefire frayed this week, though cover remains available (Bloomberg, 9 Jul). The Lloyd’s Joint War Committee has listed the whole Gulf as high-risk since March — a listing that adds cost and a notification duty but does not bar transit.

On a second front, Ukraine’s drone campaign in the Sea of Azov has escalated sharply. Its Unmanned Systems Forces say they have struck Russian shadow-fleet shipping — the tankers that move sanctioned oil and products — across a nine-day operation, with Kyiv now putting the total at 116 vessels(an unverified claim; ~76, including 21 tankers, was the earlier multi-sourced count). In response Russia suspended shipping through the Kerch Strait and the Don–Azov Canal (FSB Border Service, from 10 July) and says it may divert to Black Sea and Baltic ports — a self-imposed chokepoint closure that cut Azov AIS traffic roughly55% (Starboard Maritime). With up to a quarter of Russian wheat exports transiting the Azov, Euronext wheat jumped about 4% to a six-week high. The IMO Secretary-General condemned the Azov and Black Sea attacks, warning the focus on Hormuz should not overshadow threats elsewhere; Russia’s Lavrov called them “terrorism,” while Kyiv says it strikes only military or war-supporting assets. Neither side’s figures are independently verified (Reuters, TWZ, gCaptain).

Sources: Reuters, WSJ, Bloomberg, JMIC 013-26, NAVCENT/NCAGS, Lloyd’s JWC, IMO, CENTCOM, UKMTO. Available footage and Tier-1 reporting attribute the “cancer” remark to Iran’s government and leadership — not the Iranian people, and not a call for their eradication.