Asian markets fell sharply on Tuesday, while oil prices climbed to a one-month high, after US President Donald Trump announced that Washington was reinstating its blockade of Iranian shipping in the Gulf and would impose a 20% fee on cargo passing through the Strait of Hormuz.Following a volatile start to trading, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.7%. The losses were led by Taiwanese and South Korean stocks, which at one point fell by more than 3% and 5%, respectively. Japan’s Nikkei 225 declined 0.8%, while S&P 500 e-mini futures eased 0.3%.Chinese markets outperformed the regional benchmark despite remaining in negative territory, as cited by Reuters. The CSI 300 index slipped 0.4% after data released on Tuesday showed that China’s exports and imports in June exceeded economists’ expectations, helping limit broader losses.Meanwhile, Brent crude futures rose $1.68 (2%) to $84.98 a barrel, while US West Texas Intermediate (WTI) crude gained $1.65 (2.1%) to $79.79 a barrel. Brent had already surged 9.6% in the previous session, marking its biggest single-day gain since May 2020.Missile strike on UAE tankers adds to tensionsThe sharp rise in oil prices follows an attack on two United Arab Emirates tankers in the southern lane of the Strait of Hormuz in Omani territorial waters.According to the UAE Ministry of Defence, the vessels were hit by two Iranian cruise missiles, killing one Indian crew member and injuring eight others.War of words continuesThe tensions between US and Iran has intensified after Iranian foreign minister Seyed Abbas Araghchi mocked President Donald Trump’s proposal to impose a 20% transit fee on cargo passing through the Strait of Hormuz. In a post on X, Araghchi said Iran—not the US—has always been the “guardian” of the strategic waterway, adding, “20% is of course too much. We will be fair.”Trump had earlier declared that the US would become the “Guardian of the Hormuz Strait”, announcing a 20% charge on cargo transiting the route to recover the costs of providing maritime security. He also said the US was reinstating the Iranian blockade and that the Strait would remain open for all countries except Iran and its customers.However, Tehran has rejected Trump’s proposal, reiterating that it alone has authority over the Strait of Hormuz and warning against any US involvement in managing the waterway. The exchange marks the latest escalation in rhetoric between Washington and Tehran amid rising military tensions in the Gulf.