Trump pledged the ‘free flow of energy’ from the Middle East, and he has a week to show progress before prices really spike again |
Trump pledged the ‘free flow of energy’ from the Middle East, and he has a week to show progress before prices really spike again
President Donald Trump’s pledge to insure and escort oil and gas tankers in and out of the Middle East has kept pricing surges at bay, but he has about a week to show tangible progress before commodity prices continue spiking, energy and legal analysts said.
Setting up an emergency, government-subsidized insurance system for many hundreds of tankers is complicated enough, but also protecting them from missile and drone attacks adds another massive layer of uncertainty, experts said.
“If you don’t fix it in a week, the crude markets will get skeptical and impatient, which will translate into higher prices,” said oil forecaster Dan Pickering, founder of the Pickering Energy Partners consulting and research firm. “That’s a feedback loop that would put more pressure on the U.S. government.”
About 20% of global crude oil and liquefied natural gas (LNG) flows pass through the narrow Strait of Hormuz that’s effectively blocked from the war in Iran. Qatar already has closed its LNG production, and Iraq has shuttered much of its oil production because it lacks the domestic storage capacity. It’s just a matter of time before more of the energy-producing Gulf states follow suit.
And resuming production is a process that takes weeks to ramp up. Under normal circumstances, about 150 vessels flow through the........