Trump administration Hormuz oil security timeline uncertain: White House

The Trump administration is rolling out its plan to secure the Strait of Hormuz but does not yet have a timeline for when it will be safe for oil tankers, White House Press Secretary Karoline Leavitt said March 4.

"Certainly, it is something that is being calculated actively by both the Department of War and the Department of Energy," Leavitt said regarding the timeline and referring to the Department of Defense. "Both secretaries are in all of the briefings on this subject with the president, and this is again something they are monitoring," she said during a press briefing.

Leavitt touted President Donald Trump's announcement March 3 that the US Development Finance Corporation would provide political risk insurance for maritime trade in the Persian Gulf and, if necessary, the US Navy would escort tankers through the Strait of Hormuz.

Treasury Secretary Scott Bessent, Energy Secretary Chris Wright and Interior Secretary Doug Burgum began working on a plan to address impacts to oil prices and the economy well ahead of the start of the war with Iran, Leavitt said.

The need for the US to take action on insurance and security in the Strait underscores the importance of military intervention, Leavitt said.

"I think it speaks to why this action was so necessary that ultimately the energy industry is going to benefit from the president's actions with respect to Iran because Iran will no longer be controlling the Strait of Hormuz and restricting the free flow of energy," she said.

But some analysts say more may still be needed to ease energy price pressures.

"To be blunt, shoring up insurance gaps may not be enough to persuade sea captains, shipowners, operators and offtakers to bear risks associated with sailing through an active combat zone," ClearView Energy Partners said in a March 4 note.

In theory, naval escorts could protect against attacks, but a drone barrage could potentially outstrip US defensive measures, the note said. Supply risks also extend beyond transit and apply to energy infrastructure with unclear repair timelines, the note said.

The longer the Strait of Hormuz remains impaired, the more necessary it may be to release strategic reserves, but Trump administration does not yet seem ready to pursue this route, the ClearView note said.

Oil and shipping flows through the Strait of Hormuz remain stalled despite the US insurance pledge, as recent attacks and security threats keep vessel traffic at a near standstill.

"The situation remains fluid, but what's clear is that prolonged conflict is very bullish for cracks across the barrel in all hubs, and especially for European distillates," said Rebeka Foley, oil analyst at S&P Global CERA. She warned that if tensions persist, market volatility and elevated prices are likely to continue.

SPR politics

Clayton Seigle, a senior fellow at the Center for Strategic and International Studies, said that while the Biden administration drew from the Strategic Petroleum Reserves at the start of the Russia-Ukraine war, the Trump administration has a different stance.

"This administration has said that it's only to be used in the event of an acute supply disruption and not to mitigate price increases," Seigle, said during a March 2 CSIS event.

The US SPR contained 415 million barrels of crude as of Feb. 27, according to the DOE. The SPR has a drawdown capability of 4.4 million b/d, and it takes 13 days from any presidential decision for oil released from the SPR to enter the US market, according to the DOE's website.

The Department of Energy has not responded to requests for comment on whether the administration would consider releasing crude from the Strategic Petroleum Reserve.

In his January 2025 inaugural address, Trump promised to refill the SPR "right to the top." Republicans allocated $171 million for SPR refills in their 2025 budget reconciliation package, despite Wright's request to lawmakers for $20 billion to fully refill the reserve to its full capacity -- an effort that, even if fully funded and carried out at the fastest possible speed, could take until 2031, an S&P Global Energy CERA analysis found.

The Trump DOE has completed just one purchase for the SPR, a Nov. 21 acquisition of 900,000 barrels.

The administration's preference for SPR refills could come under meaningful political pressure if energy prices rise significantly and persistently during the conflict, Arnab Datta, managing director at Employ America, told Platts.

Trump mentioned SPR refills far more frequently than recent presidential candidates, Datta said, but did not prioritize them in 2025's budget reconciliation and remained sensitive to voters' cost-of-living concerns.

"The longer the strait remains functionally closed, the more we see Gulf production shut in and facilities under threat, the more likely you are to have a price scenario that rises to $100/b and stays there for at least several weeks," Datta said. "The market doesn't seem to be making that bet now, but scenarios like that are plausible."

"At that point, the question of whether they would change their tune, there would be enormous pressure for them to do so," Datta said.