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US Eyes Hormuz Escorts by April as Trump Downplays Oil Spike
'When Oil Prices Go Up, We Make a Lot of Money,' President Posts on Social
The U.S. Navy could start escorting tankers through the Strait of Hormuz by the end of this month, Energy Secretary Chris Wright said, while President Donald Trump signaled he sees some benefits from the global oil price surge.
Wright said March 12 that U.S. military assets were currently focused on destroying Iran’s offensive capabilities and weapons manufacturing, but could shift focus to protecting shipping traffic in the coming weeks.
“It will happen relatively soon, but it can’t happen now. We’re simply not ready,” Wright said on CNBC.
Asked if escorts could be provided by the end of the month, Wright said: “I think that, yes, I think that is quite likely the case.”
Later March 12, Trump indicated he’s digging in as the joint U.S.-Israel assault on Iran stretched into a second week. It was the latest mixed signal from the U.S. president, who less than 24 hours earlier said that Tehran is “pretty much at the end of the line” of their military capabilities but cautioned that “doesn’t mean we’re going to end it immediately.”
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump posted on social media, adding that stopping Tehran from “having Nuclear Weapons, and destroying the Middle East and, indeed, the World” is “of far greater interest and importance to me.”
Taken together, the comments show how Trump and his team continue to grapple with the geopolitical and economic consequences of the conflict that the president initiated on Feb. 28. Rising oil prices have driven up fuel costs for Americans ahead of the November midterm elections, which are expected to hinge on the public’s views on the cost of living.
Ordering U.S. Navy ships to escort tankers could cause American servicemembers to be thrust into harm’s way in order to protect oil supplies. Iran’s new supreme leader, Ayatollah Mojtaba Khamenei, said March 12 the strait should remain shut, signaling Tehran has no intention of ending the waterway’s effective closure anytime soon.
Wright’s comments came after he wrote in a now-deleted social post March 10 that the U.S. had successfully escorted an oil tanker through the Strait of Hormuz. Some 20% of the world’s oil and natural gas passes through the narrow shipping lane. The White House later walked back Wright’s claim and denied that any escorts had occurred.
Since the U.S. and Israel launched the joint military operation on Iran, trade through Hormuz has all but come to a standstill, choking off the flow of oil from the Persian Gulf and sending crude prices soaring 40% in the days since. Global oil futures briefly jumped above $100 a barrel March 12.
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The Trump administration announced March 11 it would release 172 million barrels from the U.S. emergency oil reserve as part of a coordinated effort by nations around the world to ease surging crude prices.
The reserve only contains roughly 415 million barrels, about 60% of its capacity. Wright told CNBC that the U.S. planned to swap the 172 million barrels it was releasing from the system for more than 200 million barrels to be delivered at later dates. That’s because at the moment, crude futures in the months ahead are significantly cheaper than they are now.
“Ultimately, this is going to help us fill the reserve,” he said.
