Oil spikes amid Iran blockade talk
Markets surged and oil topped $100 a barrel after reports that the U.S. prepared a blockade of the Strait of Hormuz and as President Trump threatened 50% tariffs on China over alleged arms shipments to Iran. The twin risks—supply disruption through the Strait and a large tariff shock—sent futures lower at points and pushed investors to reprice inflation and geopolitical exposure. ( )
Oil jumped above $100 a barrel after President Donald Trump said the United States would blockade the Strait of Hormuz and threatened 50% tariffs tied to alleged Chinese arms shipments to Iran. (cnbc.com) Trump said Sunday, April 12, that the United States Navy would begin blockading ships trying to enter or leave the Strait after talks in Pakistan failed. Reuters reported on Monday, April 13, that the deadline had passed and Tehran threatened retaliation against Gulf neighbors’ ports. (cnbc.com, reuters.com) Trump also threatened a 50% tariff on China after a report said Beijing was preparing to send Iran new air-defense systems. CNBC reported the threat early Monday, April 13, after Trump said he had heard reports about anti-aircraft missiles headed to Iran. (cnbc.com) The Strait of Hormuz is the narrow waterway at the mouth of the Persian Gulf, and it carries one of the world’s biggest concentrations of energy traffic. The United States Energy Information Administration said flows through the strait averaged 20.9 million barrels a day in the first half of 2025, equal to about 20% of global petroleum liquids consumption and one-quarter of seaborne oil trade. (eia.gov) The same route also carried about one-fifth of global liquefied natural gas trade in 2024, mostly from Qatar, according to the Energy Information Administration. That leaves oil, gas, shipping and insurance markets exposed when military threats move from rhetoric to naval action. (eia.gov) Markets reacted to both risks at once: a possible disruption to physical oil supply and a possible new trade shock between the United States and China. Bloomberg reported that United States stocks reversed earlier losses on April 12 as oil rose, while CNBC said investors were treating the blockade and tariff threat as a fresh inflation risk even as equity selling stayed muted. (bloomberg.com, cnbc.com) Reuters reported that experts called a blockade a major, open-ended military operation that could strain an already fragile ceasefire and invite retaliation from Tehran. A blockade would require the United States to stop or inspect commercial shipping in one of the busiest oil corridors in the world. (usnews.com) China has not publicly accepted Trump’s allegation in the CNBC report, and the White House page available from 2025 shows Trump has used emergency trade powers before to raise tariffs on Chinese imports. That leaves traders trying to price two separate questions at once on April 13: whether ships can move through Hormuz, and whether Washington is opening another tariff front with Beijing. (cnbc.com, whitehouse.gov)
