US Energy Secretary Chris Wright announced on Friday that the US military is assisting in the movement of approximately 7 million barrels of oil per day out of the Arabian Gulf. Speaking at an event in Houston, Wright revealed that this volume represents about half of the oil flow that has been stranded in the Strait of Hormuz since the onset of the US-Israeli conflict with Iran.
Military Efforts and Oil Flow
Wright highlighted a relatively recent military operation aimed at facilitating the export of oil cargoes. He stated, “We have a military effort that we’ve not talked a lot about, which started more recently to get cargoes out.” According to Wright, no Iranian crude is currently exiting the Strait, but he expressed optimism that a potential deal could restore the free flow of all products through the Arabian Gulf. In the absence of an agreement, he affirmed that the US military would continue efforts to restore the flow.
Industry Reactions and Price Implications
The disclosed flow of 7 million barrels per day exceeds earlier industry expectations. Dan Pickering, chief investment officer at Pickering Energy Partners, noted that this figure is larger than what the oil industry had anticipated. Rebecca Babin, senior energy trader at CIBC Private Wealth, added that current oil prices in the $88 range suggest investors had assumed only about 3 to 4 million barrels were flowing through the Strait. Wright also mentioned the possibility of partially lifting some sanctions on Iran if a deal is reached, and that a US gasoline tax holiday over the summer could help reduce prices.
