This is breaking news and so not everything has been hashed out but I did get an alert that this was something that was being considered half an hour ago. During the Iran/Iraq War the U.S. did escorts for oil tankers so this is not something that is out of left field. By doing this and offering insurance this will help settle the oil market as long as we see it come into play over the next couple of days.
It should be noted that this will not entirely fix the issue at hand and some oil/shipping companies might still be hesitant to risk their ships but this is a big first step.
Trump said that he has ordered the U.S. Development Finance Corporation to provide “political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf.”
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible,” he wrote.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” he added. “The United States’ ECONOMIC and MILITARY MIGHT is the GREATEST ON EARTH — More actions to come.”
It only helps if they can actually protect those tankers. Otherwise, we're just paying for blown up ships and not getting any oil.
I have a strong feeling that those tankers if they decide to go with US escorts would be extremely protected. It is also extremely risky for Iran to shot towards a US ship right now. It would only further give the US and Saudi, Qatar, and other more reason to go after Iranian assets if this were to occur.
They've been attacking US ships. I don't see why this would be different.
They haven’t come close to hitting one and the last country that sunk one had a couple suns dropped on it. Threats and half assed attempts are one thing but if oil/LNG ships are being escorted by the U.S. Navy it’s just a whole other political ballgame.
The Gulf States have increasingly raised their rhetoric against Iran including talking about reserving the right to attack Iran. Hitting ships carrying Gulf States oil is a whole next level that could very easily make the case for Gulf States to join in the attacks since they have nothing left. Their economies are already coming to a stop and their infrastructure that isn’t utilized or part of the U.S. has slowly been getting hit more and more.
That level of crazy from Iran would not only sign more death certificates but make it even more likely the regime would fall. Those boarding them would have nothing to lose arming Sunni groups to fight the Shitte Islamic regime. Iran after all is the only Shiite country
That’s a sensible idea to help the tankers get through safely. Oil prices have dropped slightly, perhaps on this news. Will this lead to a much bigger dip in the price of oil if it proves a success over the next few days?
I am not sure if it can move the sheer quantity to drive prices back down to what it was without Iran stopping. It should like you said though cause an improvement.
With only 20% of oil passing through the straight I think we have seen an overinflated jump in the price.
Maybe this news will help to correct the price to a more sensible level bearing in mind the current situation.