Trading Energy Threats
U.S. Defense Secretary Pete Hegseth vowed on Tuesday that “today will be, yet again, our most intense day of strikes inside Iran” at the same time that Iranian forces unleashed a new barrage of attacks on Israel and its Gulf neighbors. With both Washington and Tehran ruling out cease-fire talks, experts expect the global energy crisis to worsen as the war trudges on.
Fears of Iranian attacks coupled with high insurance costs have largely halted oil and gas tankers from traversing the Strait of Hormuz, where around 20 percent of the world’s crude normally passes. On Tuesday, Iran’s Islamic Revolutionary Guard Corps said that Tehran “will not allow the export of even a single liter of oil from the region to the hostile side and its partners until further notice,” adding that “we are the ones who will determine the end of the war.”
In response, U.S. President Donald Trump warned that “If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.”
Such threats have left global markets scrambling. The cost of a barrel of Brent crude hit around $90 on Tuesday, nearly 24 percent higher than when U.S.-Israeli strikes first targeted Iran on Feb. 28. That, however, is down from Monday’s spike, which saw Brent prices reach almost $120. West Texas Intermediate crude also recorded falling prices from Monday into Tuesday, though costs still hit around $85 per barrel.
“The Strait of Hormuz will either be a path of peace and prosperity for all, or a path of failure and suffering for warmongers,” Ali Larijani, Iran’s top national security official, wrote on X on Tuesday.
The Trump administration is pursuing several strategies to counter high oil prices. On Thursday, Treasury Secretary Scott Bessent issued a 30-day waiver for India to buy Russian crude already at sea in an effort to “enable oil to keep flowing into the global market.” The following day, Bessent revealed that Washington is considering lifting even more sanctions on Russian oil.
The U.S. Development Finance Corporation has also begun offering a backstop for maritime insurance to persuade tankers to make the risky trip through Hormuz, though experts say that the plan is likely inadequate to address the scale of the problem.
In addition, the White House has said that it is considering having the U.S. Navy escort tankers through the strait. And on Tuesday, oil prices dropped in response to a post on X by U.S. Energy Secretary Chris Wright announcing that the U.S. Navy had “successfully” carried out such a mission; however, minutes later, the post was deleted without explanation.
White House press secretary Karoline Leavitt said in a press briefing shortly after that “the U.S. Navy has not escorted a tanker or a vessel at this time,” though she noted that “that’s an option the president has said he will absolutely utilize if and when necessary at the appropriate time.”
Meanwhile, the International Energy Agency (IEA) convened an emergency meeting on Tuesday to decide whether to release emergency oil stockpiles to help bring down costs; IEA member nations hold more than 1.2 billion barrels of public crude reserves.
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