2026-03-12 13:17:00
Trump yesterday told tanker operators to “show some guts” and sail through the Strait of Hormuz. A US-owned and Greek-owned tanker decided to try and they were hit by explosive RC boats and are now in flames.
That has renewed talk about naval escorts through the strait but France said yesterday and it will take “a few weeks” and US energy secretary Wright said it would take until the end of the month.
At best that’s a long wait and it’s not clear if it’s possible to protect those boats from underwater missiles, drone attacks and mines.
A report earlier today said Trump was considering limiting US exports, which would make the situation better in the United States but worse for everywhere else.
If the strait is closed for 3 months, Bloomberg estimates oil will reach $164 a barrel.
Meanwhile, in the WSJ there is this:
“Reopening the strait, military analysts say, may require a ground operation to seize the Iranian coastline.”
The bigger question is whether there is any off-ramp here.
Former IMF leader Olivier Blanchard writes today:
There is no reason, whether or not Trump declares that war is over, to think that Iran will not continue for some time to threaten to destroy the ships that try. Why should they stop?
He sees oil prices rising as high as $200 per barrel.
So what next? Regime change doesn’t seem as though it’s working. A Reuters report says:
U.S. intelligence sees no immediate risk of regime collapse in Iran, nearly two weeks into the U.S.–Israel war, according to sources familiar with the assessments.
So right now the market is grasping for some semblance of a plan to end it. Trump has highlighted that the US was ‘way ahead’ of his 4-5 week schedule but now it’s not clear if he’s the one who gets to decide when the war ends.
WTI crude was last up $5.92 to $93.17 after rising to $95.97 earlier.
WTI crude oil daily
Trump is now on the wires downplaying oil:
- US makes a lot of money when oil price goes up
- It’s more important to me that Iran is stopped than high oil prices
Here is the full message:
US President Trump: 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.
…so high oil prices it is.
