Trump to Enhance Control of the Strait of Hormuz, US Strategic Petroleum Reserve Falls to Lowest Level Since 1983

BlockBeats News, July 14th, President Trump of the United States stated that the U.S. should control and operate the Strait of Hormuz, considering imposing a fee on passing ships equivalent to 20% of the cargo value to offset the cost of strait security maintenance. At the same time, Trump said the U.S. may continue military actions against Iran, with the U.S. military conducting airstrikes against Iran for the third consecutive night.

Analysis points out that with the navigation of the Strait of Hormuz still not fully resumed and the U.S. in the peak summer travel season, the U.S. Strategic Petroleum Reserve (SPR) and commercial crude oil inventories may continue to decline, further supporting the international oil price rally. As of the week ending July 3rd, the U.S. Strategic Petroleum Reserve dropped to 319.5 million barrels, the lowest level since 1983, only slightly above the suggested safety threshold of about 250 million barrels.

Market participants believe that if the disruption in the Strait of Hormuz persists, even with relatively sufficient domestic U.S. crude supply, the global crude benchmark price may continue to rise, thereby increasing inflationary pressures and raising the possibility of the Fed maintaining a high-interest-rate policy. Iranian Foreign Minister Zarif responded by stating that any party ensuring the safe passage of the Strait of Hormuz should receive compensation, but he believes that the 20% fee proposal is too high.