Trump Administration Reimpose Iran Sanctions, Impose 20% Strait of Hormuz Fee; Oil Price Risks Rise

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According to Citigroup, the Trump administration announced reinstatement of sanctions on Iran and a 20% "security fee" on all shipments through the Strait of Hormuz. If implemented, the move would significantly raise the risk of U.S.-Iran escalation and increase the likelihood that Iran withdraws from any understanding agreement before U.S. midterm elections, potentially sustaining elevated oil prices for an extended period. Citigroup currently expects both countries to return to diplomatic negotiations within one to two weeks.
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