The US military is not yet prepared to escort tankers through the Strait of Hormuz, US Energy Secretary Chris Wright said March 12, as the US-Israel war with Iran and the halt in tanker traffic through the key waterway continued to push crude futures higher.

“It’ll happen relatively soon, but it can’t happen now,” Wright said in an interview with CNBC. “We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities.”

Wright’s comments came as the administration of US President Donald Trump attempted to calm global energy markets. Late March 11, the Department of Energy announced it would release 172 million barrels of crude from the US Strategic Petroleum Reserve, part of a 400 million barrel release by members of the International Energy Agency.

Prices continued to rise in midmorning European trading March 12, as overnight attacks on tankers overshadowed the strategic reserves release. The state-run Iraqi News Agency announced Iraq’s oil terminals had been fully suspended after two ships involved in a ship-to-ship transfer were attacked.

At 1100 GMT, the ICE May Brent futures contract was up $4.44/b from the previous close, trading at $96.42/b, while the NYMEX April WTI light sweet crude contract rose $3.78/b to $91.03/b.

On March 3, US President Donald Trump announced that the US would begin a reinsurance program for companies that had lost commercial insurance coverage after the start of the conflict. He also said the US Navy would begin escorting tankers through the Strait “as soon as possible.”

On March 10, a post on Wright’s X account claimed the US Navy had escorted its first ship through the passage, after which crude futures sharply declined. That post was subsequently deleted. A Department of Energy spokesperson confirmed to Platts, part of S&P Global Energy, that it was mistakenly posted by DOE staff.

On March 11, despite the attacks in the region, Trump encouraged US companies to use the Strait. When asked whether Iran had placed mines in the waterway, he said “we don’t think so.”

A spokesperson for the US Department of War did not comment on whether shipping companies had yet asked the US for military escorts.

Wright said he expected the Navy to be ready to begin escorts by the end of March.

“This is an operation that will take weeks, not months,” he told CNBC.

Source: Platts