Iran Conflict Keeps LNG Routes Diverted and Brent Above $83 After Trump's Hormuz Toll Plan Failed
With LNG tankers still avoiding the strait and Trump's 20% transit fee abandoned within 24 hours, oil and gas markets are treating Hormuz disruption as the baseline, not a shock.
ICE Brent crude front-month held at $83.56 a barrel on Friday (2026-08-07), elevated and unresponsive to President Trump's brief attempt to monetize the Strait of Hormuz, a plan to charge a 20% transit fee that he announced and dropped within roughly 24 hours in mid-July, leaving the underlying shipping disruption unchanged.5,7
The announcement moved markets sharply. When Trump declared Hormuz "will remain OPEN, with or without Iran" around Sunday (2026-07-12) night and demanded a 20% reimbursement on all cargo transiting the waterway, NYMEX WTI front-month futures surged 9.4% to settle near $78 a barrel, the highest in nearly a month, and ICE Brent closed above $83. By Tuesday (2026-07-14), ICE Brent reached as high as $87, its first trade at that level since June. Oil is up around 40% since the start of 2026.5,6
Trump scrapped the fee within 24 hours. Iran's IRGC had stated the only way to restore normal shipping through the strait was to end US military operations, a condition that left nothing for cargo owners or shipping companies to negotiate around.7
The toll idea illustrated how far Hormuz transit economics have shifted. At current prices, a 20% charge would work out to roughly $32 million on a single supertanker, Rigzone reported — compared with as much as $2 million that Iran has charged as its own toll. More than ten people in shipping markets questioned how the fee would be collected and who would bear the cost.5
LNG shipping had already restructured its routing before the toll episode. Vessels have been avoiding the strait amid fears of being caught in the crossfire if the fragile US-Iranian ceasefire fails to hold, and insurance for tankers attempting transit has become "trickier," analysts told Montel. Iran had restricted nearly all non-Iranian shipping through the chokepoint.1,2
The scale of the disruption gives those routing decisions their weight. The Strait of Hormuz handles roughly 20% of global oil and LNG supply. Traffic through it collapsed by approximately 90% after US-Israeli strikes on Iran began on February 28, 2026. Three months in, analysts estimated the world had lost around 1 billion barrels of crude supply and more than 10 million barrels per day of production volume, a deficit no increase from alternative suppliers has been able to cover.3
Some Gulf loading continued regardless. LSEG data showed a fourth Very Large Crude Carrier at Saudi Arabia's Ras Tanura terminal on Monday (2026-06-29), despite a helicopter crash on Sunday (2026-06-28) that killed 14 people. Kpler data showed Iranian-flagged VLCCs entering the strait on Saturday (2026-06-27), while about 8 million barrels of Emirati and Qatari crude moved out on four VLCCs that weekend.4
LNG tankers face a different cost structure than crude carriers. Diversion around the Cape of Good Hope adds weeks to voyage times and amplifies insurance costs in ways crude cargo economics can sometimes absorb. Asian JKM LNG traded at $21.14 per MMBtu on Friday (2026-08-07), while ICE Endex TTF front-month held at €55.74 per MWh in European trading the same day, both reflecting a gas supply picture that has not normalized.
S&P Global reported the Iran conflict has accelerated investment in US LNG capacity, with project sponsors treating the Hormuz closure as a structural argument for Atlantic Basin supply rather than a disruption to wait out.8
Tony Sycamore, market analyst at IG, captured the underlying uncertainty in late May 2026 after renewed US strikes: "It's a sharp reminder that the deal could still collapse at the 11th hour, much like the five previous attempts before it."2 With the IRGC's stated condition for reopening the strait still unmet and Brent trading above $83 on Friday (2026-08-07), the next ceasefire attempt is the signal LNG shipping markets are positioned around. Five have already failed.