WASHINGTON — Energy Secretary Chris Wright said Thursday that US military escorts for oil tankers through the crucial Strait of Hormuz “can’t happen now” but are “quite likely” to be in place by April — as Iran’s new supreme leader, Mojtaba Khamenei vowed to keep the waterway closed as a “tool to pressure the enemy” with higher energy prices.
The cost of oil surged Thursday, with Brent crude hovering around $100 per barrel as of midday, after at least seven ships were attacked by Iran in the Strait of Hormuz and Persian Gulf since Wednesday.
“It can’t happen now,” Wright told CNBC when asked about the possibility of military shipping assistance.
“We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities.”
Pressed on whether the US Navy would be escorting ships “by the end of the month,” Wright said, “Yes, I think that is quite likely the case.”
About 20% of global oil shipments transit the Strait of Hormuz — most of it going to Asian countries, though the bottleneck has put upward pressure on prices globally.
Shipping in the waterway mostly has stopped since the war began on Feb. 28.
According to MarketWatch, just eight commercial transits through the strait were recorded Tuesday, most with links to Iran or China — down dramatically from an average of 153 ships per day ahead of the attack.
In addition to oil, the strait is an important passageway for natural gas and helium, which is used for cooling in semiconductor manufacturing.
Earlier this week, Trump promised that “when the time comes, the US Navy and its partners will escort tankers through the strait, if needed.
“I hope it’s not going to be needed, but if it’s needed, we’ll escort them right through.”
Meanwhile, the President has attempted to coax ships to make the risky voyage by offering a new $20 billion US government-backed reinsurance program, but has found few takers.
‘Get ready for oil to be $200 a barrel’
Khamenei vowed Thursday in the first public statement attributed to him as supreme leader to keep the crucial passage closed as a “tool to pressure the enemy.”
Iranian military spokesperson Ebrahim Zolfaqari taunted the US Wednesday, saying: “Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilized.”
Trump has sought to blunt the impact of the war — which he says is proceeding ahead of his original four-week timeframe.
On Wednesday, the president authorized the release of 172 million barrels of oil from the US Strategic Petroleum Reserve over the next 120 days — an amount equivalent to nearly nine days of domestic consumption.
Other major countries committed to a cumulative release of a further 228 million barrels to tamp down global costs.
Trump also is considering issuing temporary waivers of the Jones Act of 1920 to allow foreign ships to transport fuel between US ports.
Energy prices have a significant pass-through effect on the cost of other goods, and the war threatens to reverse substantial progress on lowering inflation, which remained at an annual rate of 2.4% in February.
Gasoline prices have surged due to the conflict, with the cost of regular fuel averaging $3.60 per nationwide on Thursday, up from $2.94 one month ago, according to AAA data.
Rising prices threaten to undermine Trump’s political messaging on affordability issues ahead of the November midterm elections.
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