President Donald Trump announced Wednesday that the U.S. military has secretly facilitated the movement of more than 100 million barrels of oil through the Strait of Hormuz, supporting over 200 commercial ships. The operation, which Trump described as a success, aimed to stabilize global oil prices amid ongoing tensions with Iran.
Core Facts
- Trump disclosed the operation in a Truth Social post and remarks to reporters, stating the U.S. controls the Strait of Hormuz, not Iran.
- The president claimed the effort prevented oil prices from surging above $200 per barrel, keeping them around $90.
Deeper Context
Operation Details
Trump initially hinted at the operation in May, mentioning a mission called Project Freedom, which was later halted. He later clarified that the U.S. military has been assisting ships without publicly disclosing the scale. A defense official confirmed to CNBC that U.S. forces are not escorting vessels but are providing support.
Market Impact
Helima Croft, global head of commodity strategy at RBC Capital Markets, noted that ship traffic through Hormuz remains below prewar levels. About 20% of global petroleum supplies, or 20 million barrels per day, passed through the strait before the U.S. and Israel attacked Iran on Feb. 28. Iran retaliated by attacking ships and mining the sea lane, leading to the loss of over 1 billion barrels of oil—the largest supply disruption in history.
Alternative Perspectives
JPMorgan estimated that around 2 million barrels per day might be moving through Hormuz on tankers that switched off their transponders. The bank noted that despite the naval blockade and decline in commercial traffic, significant volumes of crude and petroleum products are still transiting the strait.
Political Implications
Trump also indicated that the U.S. would continue its strike campaign against Iran, stating, 'We’re going to be attacking them and attacking them very hard.' He criticized previous administrations for being 'stupid' in dealing with Iran, suggesting the current approach is more aggressive.
Economic Consequences
The effective closure of Hormuz has disrupted global oil supplies, with Trump claiming the secret operation has mitigated some of the economic fallout. However, analysts like Croft argue that the world is still losing significant volumes of oil daily.