On Tuesday, US Energy Secretary Chris Wright stated at the Atlantic Council Global Energy Forum that vessel traffic transiting the Strait of Hormuz is increasing "very significantly."
International oil prices fell in response. At the time of writing, Brent crude futures, the international benchmark, were down 4.8% to $89.73 per barrel.
Oil prices had already begun declining earlier following former President Trump's claim that a US-Iran deal could be reached within "two to three days," and Wright's remarks pushed prices lower once more.
Trump has stated that a US-Iran agreement could be finalized in "two to three days," leading to the Strait of Hormuz reopening "immediately."
As previously reported, despite violent clashes erupting this week between Israel and Iran, former President Trump has sought to convince markets that a deal with Tehran to reopen the vital Strait of Hormuz is a matter of "two to three days."
According to reports, Trump told reporters on the 9th at New York's JFK International Airport that Israel and Iran had previously been "going back and forth" but have now "agreed to a ceasefire," adding, "We are in the final stages of a very, very good deal." When asked how long the negotiations might take, Trump responded, "Two to three days."
Trump has repeatedly indicated that a deal with Tehran to reopen the Strait of Hormuz is imminent, yet such an agreement has remained elusive. The fragile ceasefire implemented in April nearly unraveled this week after Iran launched missile strikes in retaliation for an Israeli attack on Lebanon. Israel subsequently carried out a counter-strike against Iran.
Trump has reportedly pressured Israeli Prime Minister Benjamin Netanyahu to exercise restraint and avoid further attacks.
Reports indicate Trump warned the Israeli Prime Minister that launching another attack on Iran could leave Israel isolated. Trump was quoted on the 8th as telling US media he had warned Netanyahu that if war with Iran resumed, Israel might find itself alone. Netanyahu stated in a televised address on the 8th that attacks on Iran were currently "paused."
The violent clashes briefly pushed oil prices higher on Monday, but the current round of hostilities appears to have ended without further escalation. Both Iran and Israel have stated they have ceased fire.
Analysts at JPMorgan Chase & Co. suggest the actual volume of oil transiting the Strait of Hormuz may be higher than publicly visible data indicates. The bank estimates that as much as 2 million barrels of oil per day could be transported on tankers that have switched off their transponders.
In a report dated June 4th, JPMorgan analysts noted, "Despite the ongoing maritime blockade and a sharp drop in commercial traffic, a surprisingly large volume of crude and oil products still appears to be moving through the Strait."
Oil industry executives and analysts add that crude prices remain at relatively moderate levels compared to the scale of the supply disruption, cushioned by global inventories. However, they caution that as these stockpiles deplete rapidly and summer demand peaks, oil prices could surge significantly later this year.
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