FINWIRES · TerminalLIVE
FINWIRES

Trump Says Hormuz Open, Signals Iran Sanctions as US Oil Supply Expands

By

US President Donald Trump said Wednesday the Strait of Hormuz remains open but suggested the key oil route may become less important as US energy supplies expand.

President Trump delivered the remarks at the White House alongside technology leaders.

"Right now, the strait is open. A lot of boats are coming through," Trump said, adding that he believes media reports have not fully reflected the level of vessel traffic through the waterway.

Trump also signaled possible fresh strong sanctions against Iran, saying, "We have things that we could sanction... and we'll see what happens."

The president said a US naval blockade has also restricted vessels from reaching Iran, describing the measure as highly effective while acknowledging that some ships continue to reach other destinations.

"The blockade has been 100% successful. No boats have gotten into Iran, but they are getting in for other places." Trump said.

Trump said that increased US oil production, new pipelines, and alternative energy supplies could reduce the Strait of Hormuz's importance to global oil markets.

"The Hormuz Strait is not going to be quite as important as it was in the past," Trump said.

He cited Texas, Alaska and Louisiana as alternative US oil-producing regions, while also pointing to record levels of pipeline construction as another way to strengthen domestic energy flows.

"It'll either be extremely good and oil prices are going to drop like a rock, or we'll continue to do exactly what we're doing," Trump added, recalling earlier expectations that oil could reach $350 per barrel.

Trump said oil prices were at $84/bbl to $85/bbl and pointed to growing US production as an additional source of supply for energy markets.

Trump also criticized South Korea for declining to assist in efforts related to the Strait of Hormuz, saying the country receives 60% of its oil from the waterway.

Addressing reporters earlier in the day, Trump mentioned that US-Iran talks could take place "at some point."

He added that many boats had sailed through the Strait of Hormuz the previous night, reiterating that the US had possession and complete control of the strait.

Related Articles

Oil & Energy

US Oil Update: Crude Settles Higher As Prospects For Iran-US Peace Deal Fade

Crude futures settled higher in after-hours trading on Tuesday as fading prospects for a US-Iran peace deal and persistent threats to Middle Eastern shipping lanes heightened supply risks.Front-month West Texas Intermediate crude futures were up by 0.9% to $85.27 per barrel, while Brent futures eased 0.5% to $91.31/bbl.On Tuesday, air defenses in the UAE detected two ballistic missiles launched from Iran toward the UAE, according to the country's Ministry of Defense.The first missile fell outside the UAE's territorial waters, and the second missile fell within territorial waters, the defense ministry said.President Trump said on Tuesday no talks were taking place with Iran, and none were scheduled, while insisting that the strait was open, contradicting an earlier Iranian assertion that the strategic waterway remained shut to shipping.Monday marked the day by which Tehran and Washington were expected to reach a final deal under a memorandum of understanding agreed in June.The US president said that the US blockade of Iranian ports remains in full force and effect, while claiming that "all water mines have been removed or detonated".Gelber & Associates said that Iran has signaled a more aggressive posture, while Trump declined to set another deadline and threatened Oman if it interferes with US efforts.Mohammad Baqer Ghalibaf, Iranian speaker of parliament and top negotiator, reportedly said that the strait would remain shut until the US met the conditions of an interim deal signed with Iran in June.Ghalibaf said that the conditions include the US lifting its blockade of Iranian ports, lifting oil sanctions, releasing Tehran's frozen assets, and ending threats and military operations on all fronts.However, despite Trump's claims that the strait is "open and operating", the UK Maritime Trade Operations said on Tuesday that a vessel was struck by an unknown projectile while transiting outbound in the Hormuz, causing engine room damage and a crew casualty.The remaining crew was being assisted by the Omani Coast Guard, according to the report.Yemen's Houthis also attacked vessels they described as a Saudi military ship and four escorts in the Red Sea, the group's spokesperson, Yahya Saree, said on Telegram on Monday.Gelber & Associates said that an attack on a cargo ship early Tuesday and continued low transit activity through the strait reinforced those supply concerns, while disruptions in Russia and the Middle East are also tightening the global diesel market.

Oil & Energy

Hormuz Shipping Traffic Remains Constrained as 2 Vessels Hit by Unknown Projectiles

Commercial vessel traffic through the Strait of Hormuz and the Bab el-Mandeb Strait remains constrained as security risks persist around the key energy chokepoints.The continued reduction in traffic underscores the disruption facing shipping through the waterway.The UK Maritime Trade Operations on Tuesday reported that two vessels were struck by unknown projectiles while transiting the Strait of Hormuz on Tuesday.In one incident, a bulk carrier sustained damage to its starboard side and reported a crew casualty, while in another, a vessel was hit during an outbound transit, damaging its engine room and injuring a crew member.The remaining crew from the second vessel were being assisted by the Omani Coast Guard. No environmental impact was reported in either incident, and authorities were investigating.UKMTO advised vessels transiting the Strait to exercise caution and report any suspicious activity.The remaining crew was being assisted by the Omani Coast Guard, according to the report.In its 48-hour update, UKMTO said activity by Iran's Islamic Revolutionary Guard Corps persisted, including attempted attacks or harassment, unmanned aerial vehicle overflights and targeted surveillance of merchant vessels."Commercial traffic through the Strait of Hormuz remained at reduced levels," the UKMTO said, adding that independent tracking data indicated traffic remained suppressed, with single-digit numbers or no tankers transiting in either direction.The threat of drifting or uncharted mines also remained a concern.In the Bab el-Mandeb region, the UKMTO reported no confirmed attacks during the period, although commercial traffic remained below pre-escalation levels.Traffic remained subdued despite continued risks following the Houthis' July 20 declaration of a naval blockade against Saudi Arabia and earlier attacks on commercial vessels.Al-Mokha Port remains closed to commercial traffic after over 25 cumulative missile impacts and fires at berths, according to the UKMTO. The closure has forced remaining commercial logistics in the lower Red Sea to reroute.

Oil & Energy

Global Crude Markets Face Supply Crunch as Inventories Tighten, Vortexa Says

Global crude markets, which appeared well-supplied as recently as mid-July, are facing an impending supply shortfall that financial markets have yet to fully price in, Vortexa strategists said in a note on Tuesday.Vortexa analysts said that after a brief mid-July window in which global crude and condensate on the water peaked at about 1.3 billion barrels, matching levels last seen during the post-pandemic market volatility of 2020, the market has since experienced a rapid reversal.The latest data show that crude on water has collapsed by about 200 million barrels over the last four weeks, a draw rate of 7.1 million barrels per day.The drawdown is 95% larger than the decline observed in the four weeks following the outbreak of the Middle East conflict in early March.Rohit Rathod, senior oil market analyst at Vortexa, said that the broader market has been slow to react, masked by seasonal summer trading lulls and lingering optimism from July's high inventory levels.The sharp decline in floating storage is driven by a simultaneous contraction in exports from four major producers, including Iran, Russia, Saudi Arabia, and the US.Rathod said that combined seaborne exports from these nations have fallen to about 12 million b/d, a record low and a 5 million b/d drop from just one month ago.Vortexa said the supply pressure is multi-faceted. Iranian exports have plummeted toward zero following the re-imposition of a US blockade near the Strait of Hormuz after a memorandum of understanding collapsed in mid-July.Simultaneously, Saudi exports have faced constraints due to intensified Houthi threats near the Bab el-Mandeb Strait and limited vessel availability at the Red Sea port of Yanbu.Russian and Kazakh flows in the Black Sea continue to be hindered by recurring drone attacks on infrastructure. Meanwhile, US exports have tapered as Strategic Petroleum Reserve releases wind down and peak domestic refinery runs reduce the volume available for shipment.Refinery demand remains resilient as supply contracts, said Vortexa. Global onshore crude inventories have fallen by about 80 million barrels over the four weeks ending Aug. 16, with two-thirds of that draw occurring in Asia. Global observed stocks are now showing a year-on-year deficit.The crisis is compounded by a worsening global diesel shortage. Exports of diesel and gasoil from the Middle East and Russia have halved year-over-year, dropping from 3.3 million b/d to 1.6 million b/d.With Russia extending its diesel export ban through early September and ongoing Red Sea disruptions, refineries in the Atlantic Basin are operating at record utilization rates to meet demand."This means crude demand for refining will remain elevated well beyond the typical end of the peak summer season-sustaining competition for an ever-shrinking pool of available barrels," said Rathod.Vortexa analysts said that current crude prices, forward structures, and physical differentials remain undervalued compared to the reality of the physical supply chain.The combined draw rate of nearly 9 million b/d across floating and onshore inventories serves as an "extraordinary signal" that is currently being muted by summer liquidity discounts and a lag in the market's processing of voyage-level data.