EMEA crude futures retreated from earlier highs in after-hours trading on Tuesday after President Trump abandoned a proposal to impose a 20% protection fee on cargo transiting the Strait of Hormuz, as more vessels in the strategic waterway come under Iranian attack.
Brent crude futures jumped by 5.7% to $80.31 per barrel, while Murban crude futures advanced by 6.8% to $75.77/bbl.
Gelber & Associates strategists said rather than focusing on immediate disruptions in the Hormuz, traders are assessing how sustained restrictions on Iranian crude could tighten export availability over the coming months, particularly for Asian buyers that had relied on discounted barrels.
On Tuesday, Trump said that the US has abandoned plans to impose a 20% protection fee on vessels transiting the Hormuz, saying Gulf states would instead increase trade and investment with Washington.
"Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States," Trump said in a Truth Social post.
Trump's reversal comes a day after he floated the 20% plan, which contradicted his administration's past opposition to tolls in the Strait.
The International Maritime Organization, a UN agency, opposes mandatory tolls in the key energy chokepoint as illegal.
Iranian Foreign Minister Seyed Abbas Araghchi said on Monday that while Trump was correct in principle that countries responsible for ensuring the safe passage of commercial vessels should receive compensation, Tehran remains the historic guardian of the strategic waterway.
Iran fired missiles at Jordan, Bahrain and Kuwait on Tuesday after the US launched an attack on Tehran on Monday at President Trump's direction, stepping up a battle for control of the Hormuz.
The security situation in the key has deteriorated over the past week as Iran has attacked commercial ships.
Jeff LeBlanc, an analyst at TPH Energy, said that tensions have continued to escalate over the past 48 hours, with the US and Iran continuing to launch sweeping retaliatory strikes on each other.
Earlier on Tuesday, the UAE said two of its tankers were struck while transiting the waterway's southern shipping lane. Adnoc Logistics and Services, the shipping arm of Adnoc, said the two oil tankers that were attacked suffered significant damage.
LeBlanc said Hormuz traffic was already suppressed on Sunday, and deadly Iranian strikes on two UAE oil tankers will likely bring traffic to an effective standstill, resetting the stalemate.
Meanwhile, Russian energy supplies have also been disrupted as Ukraine steps up attacks on Moscow's energy infrastructure.
Ukraine's Ministry of Defense said on Tuesday that its forces struck two Russian oil refineries overnight, targeting the Salavat and Afipsky facilities with a combined processing capacity of about 16 million tonnes per year.
The attacks also hit a transshipment site near Gelendzhik and 11 vessels in the Sea of Azov, including tankers used to move Russian oil.