Apparently I forgot to hit post last night but well this still stands so...
Earlier this evening Trump announced that Tehran would be hit “twenty times harder” if it attempted to halt oil flows through the Strait of Hormuz (even though they really have tried to do so). About 24 hour ago we had oil up over $110 and over night it almost hit $120 before falling back to around $94 by the end of the trading session today. Now though it is down an additional 10% falling to $85 in West Texas or $88 in Brent.
When President Trump stated earlier that "ships were continuing to pass through the Strait of Hormuz," a lot of people were confused or outright calling B.S. and I don't shame them for thinking so. However, it has become increasingly apparent especially today that ships are pulling a card that Russia uses and are just turning off their transponders while going through the Strait. It makes it a hell of a lot harder for the Iranian's to detect and more importantly track them to strike or attempt to board.
This isn't a fix and it doesn't mean oil prices will fall all the way back down but it does mean some oil is getting out. More importantly is something I have been hashing out is that it will allow water to get into the Gulf Countries which are headed straight to a huge water crisis. Iran has even struck desalination plants in one country and have attempted to strike more. At least there is a trickle of movement through the Strait and that is before any escorts have been implemented.
Update:
Yes of course the lifting of some sanctions also helps with the price as well but the market is much more interested and happy with the Strait not being completely closed like the initial thought was.
Oil wants to be sold!
Yep!!! Saudi reversed the flow on the one pipeline it has that now sends oil to the West Coast. That pipeline will be able to get Saudi exports back up to 70% of what they were when it is all done and the flow is maxed out!
I heard that Lloyds of London had refused to insure the ships, but ol' trumpy has insured them himself 😬
Whether that's all bluster i dont know
From what I have seen it seems that the US is setting up some sort of system but it takes a couple of weeks to fully set up. In the meantime between Iran's rapidly degrading abilities, tricks like transponders off, and possible US escorts everything can be held in check till the insurance thing is hashed out. I would not be surprised that if the first few usages of it are successful for Gulf States to join in as well.
All it would take is one tanker to hit struck for oil to shoot back up again. That's the problem with Trump when you're so full of sh$t all the time it's hard to know what's real.
So Saudi has reversed its East-West Pipeline to flow to the Red Sea and within a couple more days will be able to return exports to 70% of what they were. Thats millions of barrels back on the market and really out of Iran's touch. The Houthi's could try but they do not have the capability to really pull it off.