Perhaps the US always did plan to provide armed escorts for shipping in the Strait of Hormuz, as Treasury Secretary Scott Bessent told Sky News a little earlier today. The US Navy certainly has had its hands full for the first twelve days of the war on Iran, and most of the assets deployed have focused on force protection rather than commerce protection, particularly from the threat of Iran’s ballistic missiles and drones.
With the pace of those attacks falling off – and the price of oil rising sharply, even with massive releases from strategic reserves – Bessent wants to reassure markets that, well … help is on its way:
The U.S. Navy will begin escorting ships through the Strait of Hormuz as soon as “militarily possible,” Treasury Secretary Scott Bessent told Sky News on Thursday.
“That was always in our planning, that there’s the chance that the U.S. Navy or perhaps an international coalition will be escorting oil tankers through,” Bessent said in that interview.
“My belief, that as soon as it is militarily possible, the U.S. Navy and perhaps with an international coalition, will be escorting vessels through,” he said.
Bessent’s comments came as the Strait of Hormuz has been effectively closed to shipping because of the war against Iran by the U.S. and Israel that began Feb. 28. The strait is the world’s most sensitive chokepoint for oil tankers, and its closure has caused crude oil prices to spike.
This assertion came just hours after Trump tried to put a good face on temporary price increases in the oil markets. He argued on Truth Social that it benefits American oil exporters:
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. BUT, of far greater interest and importance to me, as President, is stoping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World. I won’t ever let that happen! Thank you for your attention to this matter. President DONALD J. TRUMP
It is possible to have a little too much of a good thing. It’s true that American producers will benefit in the short run from higher prices in the global market, but Russia benefits as well, and that means more money for Putin’s Ukraine war. Plus, the real benefit of oil above $80 a barrel for the US is that it makes domestic exploration and extraction profitable, but only if it stays above that price for the foreseeable future. Trump has said this week that he wants it back down to $60 a barrel as soon as possible to keep prices low for consumers, so the main benefit of these high prices for American producers won’t be realized.
And of course, Bessent’s reassurance that we would protect oil in the Strait of Hormuz is a response to the Nepo Babytollah’s declaration that Iran would keep the strait ‘closed as a tool to pressure the enemy.’ Interestingly, Iran’s UN ambassador later contradicted the Supreme Leader on that point, according to Reuters:
Iran’s UN Ambassador Amir Saeid Iravani claims Tehran is not going to close the Strait of Hormuz, but adds it is Iran’s inherent right to preserve the peace and security of the waterway.
He makes his comments in remarks to reporters at the United Nations.
Well, is Mojtaba Khamenei the Supreme Leader, or is he just a cardboard cutout? It certainly sounds as though the Iranians are making things up as they go along. They may have been reminded that the US can basically cut off all of their exports by seizing Kharg Island, and that if Iran keeps preventing other tankers from going through, the US has no real incentive to hold back from taking that step. The only reason to hold off is to prevent Iran from blocking access to the Persian Gulf, but if they’re already doing that … maybe even Nepo Babytollah has figured that out.
Bessent also argued that the strait isn’t closed, and in fact hasn’t been mined yet either. Some tankers are passing through the strait, but those are carrying Iranian crude to China. The rest of the output is sitting still, which is why Brent crude finished the day at $101 a barrel.
In somewhat better news, US producers actually are getting a boost from the Hormuz situation, but in fertilizer rather than oil:
A war-fueled surge in the price of fertilizer is reverberating from Wall Street to the American heartland, sending shares of producers soaring while forcing farmers into tough choices ahead of the spring planting season.
Investors are betting that American fertilizer makers will be able to take market share while the output of Middle East producers is blocked from leaving the Persian Gulf, and that their profit margins will expand thanks to access to cheaper natural gas than overseas competitors.
The Middle East fighting has choked off big chunks of the world’s supply of ammonia, urea, sulfur and phosphates. It has also blocked roughly 20% of the supply of liquefied natural gas, or LNG, upon which fertilizer makers in Europe and elsewhere rely.
That would push costs up for American farmers, but it would also allow for less reliance on the Middle East for the component products. It may push up nat-gas prices too, at least in the short run, but we might see a good bump for LNG exporters to the EU.
The US needs to counter Iran’s leverage in the Strait of Hormuz, however, since that’s the last bit of leverage the mullahs and/or the IRGC have left. Taking Kharg Island would cut off almost all of their hard-currency income, and it would transform the leverage issue in the strait as well. Perhaps the White House doesn’t see this as a best use of resources, but it makes more sense than keeping the US Navy on escort duty for weeks … and it might just end the war more quickly – or at least accelerate a regime collapse.
Editor’s Note: For decades, former presidents have been all talk and no action. Now, Donald Trump is eliminating the threat from Iran once and for all.
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