US Energy Secretary Chris Wright has cautioned oil traders against anticipating a swift resolution regarding the Strait of Hormuz, a critical energy chokepoint. In a recent interview, Wright stated that banking on a consensual agreement with Iran is "certainly not a good bet" currently. He indicated that oil markets would need to continue depending on alternative transit routes, which are currently moving an estimated 10 million barrels per day of crude and petroleum products. This statement comes as Iran prepares to propose a deal for passage through the strait to other Gulf countries at a meeting in Oman.
Simultaneously, Saudi Arabia has shut down its East-West crude pipeline, a significant alternative to the Strait of Hormuz for its oil exports, following multiple attacks. This pipeline has been transporting between 4 and 5 million barrels per day. The closure of this key route has contributed to an increase in oil prices. The attacks on the pipeline have been attributed to drones launched from Iraqi territory, with Iraqi authorities seizing drone-launch platforms and pledging to prevent future attacks from its soil.
Meanwhile, the Strait of Hormuz itself remains closed following an incident where a vessel was struck by an unknown projectile, causing a fire and necessitating crew evacuation. This event occurred just before the regional meeting in Oman, where Iran is expected to brief participating countries on a proposed short-term shipping corridor through the strait. The US and Iran continue to dispute control over maritime traffic in the strait, which has become a major point of conflict.
Wright also touched upon broader energy concerns, noting that current fuel price surges are driven more by a shortage of refining capacity than by crude oil prices. He stated the Trump administration's intention to expand US refining capacity and predicted an easing of gasoline prices in the coming weeks, though he identified diesel as a more significant challenge. The Secretary also plans to deliver a strong message to Tehran at the IAEA's annual meeting, expressing concerns about Iran's nuclear program and the lack of inspector access to its near-bomb grade uranium stockpile since June 2025.
