Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil | Shipping

Trump threatens to lessen US security role in Strait of Hormuz, unveils sanctions

Oil | Crude Oil | Oil Risk | Shipping | Marine Fuels | Tankers

Saudi shut-in after attacks, and an exploding scrubber: just another week in oil

Oil

Platts Market Data – Oil

Oil | Crude Oil | Refined Products | Equities | Financial Services | Private Markets

North American Crude Oil Exports Summit, 2nd Annual

LNG | Natural Gas

Petronet deal endorses Tellurian business model in crowded US LNG field

Trump threatens to lessen US security role in Strait of Hormuz, unveils sanctions

Highlights

In tweet, Trump signals change to 40-year-old maritime security doctrine

Analyst sees move as a negotiating tactic amid heightened US-Iran tensions

US unveils new sanctions on Iranian leaders following attacks on drone, tankers

Washington — President Donald Trump signaled Monday that the US may lessen its role in the Strait of Hormuz as domestic oil and gas output grows and US energy imports from the Middle East decline.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"China gets 91% of its Oil from the Straight [sic], Japan 62%, & many other countries likewise," Trump wrote in a pair of tweets Monday. "So why are we protecting the shipping lanes for other countries (many years) for zero compensation. All of these countries should be protecting their own ships on what has always been....a dangerous journey. We don't even need to be there in that the US has just become (by far) the largest producer of Energy anywhere in the world!"

Trump's tweets indicated a weakening of a nearly 40-year-old US policy to defend national interests in the Persian Gulf at a time when key administration officials and allies have been attempting to reassure allies of the US commitment to safe transport of energy through the Strait of Hormuz as tensions increase between the US and Iran.

"I don't think it's a full doctrinal change, but I think it's a partial one," Scott Modell, Rapidan Energy Group's managing director and head of geopolitical risk service, told S&P Global Platts Monday.

Modell said Trump's tweets were likely a tactic aimed at bringing Iran to the negotiating table, or at least pausing military escalation between the two nations.

US Secretary of State Mike Pompeo met Monday with Saudi King Salman and Crown Prince Mohammed bin Salman to discuss the regional tensions and the "need for stronger maritime security to promote freedom of navigation in the Strait of Hormuz," the State Department said in a statement. Pompeo is traveling to Saudi Arabia, the UAE, India, Japan and South Korea this week, part of an effort to build a coalition against Iran.

The governments of Saudi Arabia, UAE, the UK and the US issued a joint statement Monday calling on Iran to "halt any further actions which threaten regional stability, and urge diplomatic solutions to de-escalate tensions.

"These attacks threaten the international waterways that we all rely on for shipping," the governments said, according to a statement released by the US State Department. "Ships and their crews must be allowed to pass through international waters safely."

In a tweet Monday, Senator Lindsey Graham, Republican-South Carolina, wrote that "safe navigation of sea lanes -- vital to a world economy -- is always in America's national security interest."

Last week, however, Air Force General Paul Selva, vice chairman of the Joint Chiefs of Staff, told reporters that while the US has defended freedom of navigation through the Strait of Hormuz for decades, maritime security was not "a US-only problem."

"If we take this on as a US-only responsibility, nations that benefit from that movement of oil through the Persian Gulf are bearing little or no responsibility for the economic benefit they gain from the movement of that oil," Selva said, according to a Defense News report.

In a tweet Monday, Javad Zarif, Iran foreign minister, wrote that Trump is "100% right that the US military has no business in the Persian Gulf."

About 20.7 million b/d of oil, or about 21% of global petroleum liquids demand, flows through the Strait of Hormuz each day, according to the US Energy Information Administration.

"Flows through the Strait of Hormuz in 2018 made up about one-third of total global seaborne traded oil," EIA said in a recent report. "More than one-quarter of global liquefied natural gas trade also transited the Strait of Hormuz in 2018."

It is unclear on what data Trump based his tweet claiming that China got 91% of its oil from the Strait of Hormuz. From January through April, China imported less than 44% of its crude oil from the Middle East, according to China's General Administration of Customs.

Still, US imports of Middle Eastern crude have reached historic lows as US oil output continues to shatter records, data shows.

US oil imports of crude oil from Persian Gulf countries averaged less than 1.05 million b/d in March, down from a peak of nearly 3.08 million b/d in April 2003, according to the US EIA. US oil output grew to over 11.9 million b/d from about 5.73 million b/d over the same time period, according to EIA data.

MORE SANCTIONS

The US, which reimposed oil sanctions on Iran in November, allowed sanctions waivers given to Iran's biggest crude and condensate buyers to expire in early May.

Iranian crude oil and condensate exports, which averaged about 1.7 million b/d in March, fell to about 1 million b/d in April and an estimated 800,0000 b/d in May, according to data from cFlow, Platts trade flow software, and shipping sources. The majority of those flows in May were to China, Turkey and Syria, according to these sources.

Modell with Rapidan said he expects the Trump administration, which has sanctioned all oil exports out of Iran with a stated aim of pushing Iran exports to zero, would need to formally allow about 1.2 million b/d of oil exports out of Iran for nuclear talks between the two sides to commence.

The US Department of the Treasury on Monday sanctioned Iranian Supreme Leader Ayatollah Ali Khamenei and eight senior Islamic Revolutionary Guards Corps commanders, freezing any US assets they hold and blocking them from the US financial system. Any foreign financial institutions that knowingly facilitate significant financial transactions with them could also be cut off from the US banking system.

Treasury Secretary Steven Mnuchin said the additional sanctions would be "highly effective" at increasing pressure on Iran. He said he did not consult European or other allies about the new measures.

Mnuchin declined to say whether last week's shooting down of an unarmed drone over the Gulf of Oman or recent oil tanker attacks triggered the latest sanctions.

"Some of this was in the works; some of this was in response to recent activities," he said during a White House briefing.

Trump tweeted Friday that the US had prepared a strike against Iran Thursday night, but he had called it off with 10 minutes to spare.

-- Brian Scheid, brian.scheid@spglobal.com

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com