Oil Prices Remain Stable Despite Failed Trump Plan in Strait of Hormuz

US President Donald Trump Announces Plan to Guide Stranded Vessels Out of Strait of Hormuz

On Sunday, US President Donald Trump announced that the US would guide stranded vessels out of the Strait of Hormuz, dubbed “Project Freedom”. The plan aims to help free up vessels in the Gulf. As of 05:00 GMT on Monday morning, Brent crude futures for July stood at $108.11, down 0.06 percent.

Trump’s announcement did not provide details on how the operation would work or whether it would involve US Navy escorts. Senior Iranian officials have signaled that Tehran will not cooperate with Trump’s plan, casting uncertainty over the fragile ceasefire in place between the sides since April 7.

Reports of a tanker being struck by “unknown projectiles” off the coast of the United Arab Emirates and a bulk carrier being attacked by multiple small craft off Iran were received on Monday. Neither crew was harmed, according to UK Maritime Trade Operations (UKMTO).

Oil market analysts believe that Trump’s plans are geared more towards rescuing stranded seafarers than restoring maritime traffic in the strait. Global observable oil inventories are starting to fall sharply, which may weigh on market sentiment.

The closure of the Strait of Hormuz has reduced global daily production by 14.5 million barrels, according to Goldman Sachs estimates. The US and Israel launched their war on Iran in late February, resulting in an average of 129 daily transits before the conflict began.

Source: Al Jazeera