US forces are helping move millions of barrels through the Strait of Hormuz under the cover of darkness, sometimes escorting more than 20 ships per night out of the vital waterway, US Interior Secretary Doug Burgum said Friday.
Now that sea mines have been cleared, the initiative has led to “some nights, more than 20 ships coming out,” Burgum said Friday on CNBC.
With some ultra-large carriers holding 2 million barrels of crude, that adds up to “substantial amounts of oil that have come out of the strait,” Burgum added.
Burgum’s comments offer some of the most fulsome descriptions yet of a once clandestine operation to free oil tankers and other commercial ships that have been trapped since the US and Israel launched attacks on Iran in late February.
The waterway previously provided passage for about a fifth of the world’s crude flows, and its effective closure has blocked millions of barrels from reaching the market daily, causing a global spike in oil and fuel prices.
President Donald Trump on Wednesday said the effort has helped suppress crude costs, claiming in a social media post that more than 200 commercial ships and 100 million barrels of oil had safely exited Hormuz under the “secret mission.” Separately Wednesday, Trump told reporters the US had taken 22 ships out of the strait “late at night, with no lights” to avoid detection.
Futures for West Texas Intermediate, the US oil benchmark, were trading at $85.48 per barrel on Friday, with a decline fed by optimism the US and Iran are edging close to a peace deal.
Although a US-imposed blockade is preventing Iranian crude shipments, non-Iranian oil flows through the strait have surged by about 50% so far this month. Shippers have employed tactics such as so-called dark transits, navigating the waterway with transponders and tracking signals switched off to avoid detection.
At least 1.8 million barrels exited the Persian Gulf during each of the first 10 days of June, according to Vortexa Ltd.
Burgum suggested oil markets have responded to the revived crude flows. “I think the markets figured that out before some of the tabloid press did, because you’re starting to see a softening of oil prices,” he said.
Photograph: Iranian oil tanker Grace 1 sits anchored off the Strait of Gibraltar July 20, 2019; photo credit: Marcelo del Pozo/Bloomberg