Oil prices pared their gains on Tuesday after Donald Trump announced that the United States would provide guarantees for oil tankers transiting the Strait of Hormuz. In early afternoon trading in New York, US crude was still up $1.64 at $72.87, while Brent gained $1.88 to $79.62, after jumping over  9% earlier in the session.

The initial surge was driven by fears of a prolonged disruption to regional supplies, after Iran ordered the strait closed in retaliation for US-Israeli strikes. Maritime traffic had sharply declined in this strategic waterway through which about 20% of global crude consumption transits, mainly bound for Asia.

Trump said he had tasked the United States Development Finance Corporation with providing political risk insurance and financial guarantees for maritime trade, and raised the possibility of US Navy escorts for tankers. Strategists on Wall Street say prices could top $100 a barrel if the closure of the strait were to drag on.