Oil prices today: Brent, WTI rise

Oil prices rose Tuesday as the U.S. bombed Iran before imposing a naval blockade, while President Donald Trump abandoned his demand that ships pay a protection fee to transit the Strait of Hormuz.

U.S. West Texas Intermediate futures rose 1.5% to close at $79.34 per barrel. Brent futures, the international benchmark, gained 1.72% to settle at $84.73 per barrel.

The U.S. military launched more airstrikes against Iran on Tuesday as it prepares to reimpose a blockade on the country’s ports and coastal areas at 4 p.m. ET, U.S. Central Command said in a social media post.

Trump, meanwhile, abandoned his demand that ships pay a 20% fee on their cargo to cross Hormuz under U.S. military protection. The president said the Gulf states would invest in the U.S. as repayment instead.

Trump relented after the shipping industry largely opposed the idea. The International Maritime Organization, a United Nations agency, said mandatory tolls in the strait are illegal.

Iran has sought to collect tolls for safe passage through Hormuz but the U.S. has adamantly opposed fees imposed by the Islamic Republic. Tehran agreed it will not impose one for 60 days under the interim deal it signed with the U.S.

U.S. crude oil had traded above $80 per barrel earlier in the session as Washington and Tehran continued to battle for control of Hormuz. The U.S. bombed targets along Iran’s coast Monday, the third consecutive night of strikes, to degrade Tehran’s ability to attack commercial ships, Centcom said.

Iran’s Revolutionary Guard said its forces attacked two supertankers transiting Hormuz with their transponders turned off. The United Arab Emirates’ state oil company, ADNOC, said two of its tankers were hit by projectiles while transiting the strait, killing one mariner and injuring several others.

Ship tracking firms have observed a steep fall in traffic through Hormuz since renewed fighting erupted last week after Iran attacked several tankers. The U.S. Energy Department, however, told CNBC that 8.5 million barrels of oil transited the strait on Sunday despite the hositlities with Iran.

Roughly one-fifth of global oil supplies passed through the Strait of Hormuz before the U.S. and Israel launched strikes on Iran on Feb. 28. Shipping traffic slumped after Iran began targeting vessels in the waterway in early March, but had started to recover following Washington and Tehran’s interim agreement.