The US military is currently “not ready” to escort tankers through the critical Strait of Hormuz because all its assets are focused on striking Iran, Energy Secretary Chris Wright said Thursday.
Wright’s comments came as an attack on two oil tankers off Iraq killed at least one person, and oil prices briefly soared past $100.
Since launching the war on Iran, US President Donald Trump has sought to calm the markets by offering US Navy escorts for oil tankers and reinsurance facilities for shipping companies -- but no escorts have so far taken place.
“It’ll happen relatively soon, but it can’t happen now. We’re simply not ready,” Wright told CNBC. “All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities.”
He added that it was “quite likely” such escorts would be taking place by the end of the month.
On Tuesday, Wright sent oil prices see-sawing when he said US ships had carried out an escort, before his social media post was swiftly deleted and the White House denied that such an operation had occurred.
As Iran launches a new wave of attacks against Gulf energy targets, the International Energy Agency said the war “is creating the largest supply disruption in the history of the global oil market”.
US and Israeli strikes on Iranian targets -- including energy infrastructure -- have also disrupted supplies.
The conflict has sent energy prices spiking, including in the United States, creating a political headache for Trump.
On Thursday, the US president sought to address the issue, saying that stopping Iran from acquiring nuclear weapons was more important to him than gasoline prices.
“The 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,” said Trump in a post on his Truth Social platform.
IEA member countries on Wednesday agreed to unlock 400 million barrels of oil from their reserves -- their largest release ever.
The United States will be releasing 172 million barrels, Wright said, under a swap arrangement that would see 200 million barrels flow back to its Strategic Petroleum Reserve (SPR) “within a year.”
The move was unable, however, to overcome fears about the choking of energy supplies, with the Strait of Hormuz -- through which a fifth of global crude passes -- effectively shut down.
Wright said he had meetings at the Pentagon on Thursday to discuss possible US Navy escorts for tankers.
The US energy secretary told CNN on Thursday that he believed markets were “very well supplied with oil right now” and that short-term pricing was “based on psychology more than flows of oil.”
The United States has also moved to ease sanctions on some Russian at-sea oil, notably allowing India a temporary waiver to buy that oil in order to address supply issues caused by the war.
Wright told CNN that waiver did not amount to “sanctions relief” for Russia, arguing the oil was already bound for China.
“Russia is not getting sanctions relief. All of that oil is oil on the water that’s waiting in line to unload into China,” he said, terming the waiver a “pragmatic solution” in the current crisis.
Wright’s comment came a day after an envoy for Russian President Vladimir Putin met with US negotiators in Florida, in the first talks between Moscow and Washington since the start of the Iran war.
Kirill Dmitriev called the meeting “productive” and said Washington was “beginning to better understand” the importance of Russian oil.
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