Energy Secretary Says Traffic Through Strait Of Hormuz Is Rising ‘Very Meaningfully’ Despite Lack Of Deal

Energy Secretary Chris Wright said traffic through the Strait of Hormuz is rising “very meaningfully” despite the lack of an agreement with Iran.

Speaking at the Atlantic Council conference, he said figures are compared to traffic from one or two weeks ago.

However, he noted that it would still take several months to get back to pre-war traffic if the waterway is reopened soon as a result of an agreement.

Al-Arabiya noted that even though both the U.S. and Iran are blocking the waterway, traffic has increased as vessels cross with their transponders off and in the dark.

Oil prices are falling on Tuesday after President Donald Trump said a deal to end the war in Iran could happen in “two or three days.”

Speaking to press after attending the NBC Finals in New York, Trump said the Strait of Hormuz would be reopened “immediately” after a deal, which he described as “very good” and claimed it will “not in any way allow nuclear weapons.”

Analysts, however, remain wary of the immediate future if there is not a concrete deal. Oil executives have also been warning the Trump administration that oil prices will likely surge in the next weeks as inventories continue to decrease.

Politico detailed that the warnings came as data showed that fuel makers were largely relying on oil and fuel from storage tanks to replace products no longer arriving.

One industry executive told the outlet that inventories are at “dangerously low levels” and that they have “shared those concerns at the highest levels of government about what’s coming in mid-to-late June.” “You’re hitting tank bottom.”

A White House official, however, rejected such scenarios have taken place. “Politico’s anonymous sources are wrong,” the official said.

Regardless, public warnings abound. Strategists who spoke to The Washington Post noted that even if the key waterway is quickly reopened, U.S. consumers will still face high fuel prices due to low inventories.

“These shock absorbers have been surprisingly effective,” said Jim Burkhard, global head of crude oil research at S&P Global Energy.

Similarly, JPMorgan analysts said their base case scenario should the Hormuz Strait reopen in June would maintain Brent crude prices around $100 for the rest of the year. If it lasts longer, prices will increase $5 more in the third quarter and reach $115 in the last one of the year.