Oil Price Update: Trump’s Hormuz Shipping Plan Fails to Move Oil Markets as Skepticism Grows

TLDR

• Brent crude steadied above $108 a barrel after an initial 2.4% drop at Monday’s open
• Trump announced the US will guide stranded commercial ships out of the Strait of Hormuz
• The plan does not currently include Navy warships physically escorting vessels
• A tanker was reportedly hit by projectiles 78 nautical miles north of Fujairah on Sunday
• Markets showed little confidence the plan would meaningfully reopen the strait

Oil prices steadied on Monday after an early sell-off, as traders weighed a new US plan to help stranded ships exit the Strait of Hormuz.

Brent crude was little changed above $108 a barrel after falling as much as 2.4% at the open. West Texas Intermediate held near $102 a barrel.

US Central Command confirmed it would provide military support, including guided-missile destroyers, aircraft, and drones. However, the Wall Street Journal reported the plan does not currently include Navy warships physically escorting ships.

The announcement failed to lift prices for long. Analysts and traders quickly questioned how effective the plan would be.

Tanker Hit as Tensions Stay High

A tanker reported being struck by projectiles on Sunday, 78 nautical miles north of Fujairah in the United Arab Emirates. The UK Maritime Trade Operations reported the incident. The vessel was not identified, but crew members were said to be safe.

Iran rejected the US plan. Any American interference in the strait would violate the ceasefire, Al Mayadeen reported, citing Ebrahim Azizi, head of Iran’s parliament’s National Security Commission.

The conflict began in late February after the US and Israel attacked Iran, citing concerns over Tehran’s nuclear program. Since then, a double blockade has formed, with Iran stopping ships from leaving the Persian Gulf and the US intercepting vessels headed to or from Iranian ports.

Supply Pressures Mount

Treasury Secretary Scott Bessent said over the weekend that Iranian oil well closures could begin “in the next week” as the country’s storage fills up.

Crude oil has hit its highest level since 2022 in recent weeks due to the conflict.

OPEC+ agreed over the weekend to a small symbolic increase in June quota levels, as the group sought to project stability following the exit of the United Arab Emirates.

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