Besent reassures with a "calming pill": Ample oil supply in the market, more measures will be introduced to stabilize Persian Gulf oil transportation!

On Wednesday, U.S. Secretary of the Treasury Janet Yellen stated that during the military actions by the U.S. and Israel against Iran, oil market supplies remain ample. The Trump administration will support tankers passing through the Persian Gulf and will announce more measures in the coming days.

“Oil supplies are very sufficient, with hundreds of millions of barrels in transit in waters far from the Gulf region. But more importantly, we are about to release a series of related announcements,” Yellen said in an interview.

Yellen’s latest comments come as markets remain highly alert to the potential disruption of the Strait of Hormuz. This narrow waterway accounts for about one-fifth of global oil exports.

As U.S. and Israeli strikes on Iran escalate, regional tensions have intensified. Shipping through the Strait of Hormuz has been paralyzed for five days, disrupting key oil and natural gas supplies in the Middle East. In recent days, international oil prices have surged significantly, reigniting concerns over U.S. inflation and a potential recession.

Yellen also stated on Wednesday that the U.S. International Development Finance Corporation (DFC) will provide insurance for oil tankers and cargo ships operating in the Persian Gulf region, with arrangements announced on Tuesday. She added that the U.S. will stay in contact with shipowners in the coming days and will introduce more measures later.

Yellen further said, “Therefore, the U.S. government will intervene as appropriate, and when necessary, the U.S. Navy will provide safe passage for oil tankers through the strait.”

This echoes President Trump’s remarks on Tuesday, when he said the U.S. would provide insurance for tankers through the DFC and, if necessary, send the U.S. Navy to escort tankers through the Strait of Hormuz.

The latest statements from the Trump administration have eased tensions in the energy markets. On Wednesday, international oil prices closed flat, ending a highly volatile trading day. Brent crude settled at $81.40 per barrel, unchanged from Tuesday’s close, reaching its highest level since January 2025. U.S. crude rose by 10 cents, or 0.1%, to $74.66, marking the second consecutive day of the highest close since June.

In comparison, U.S. crude prices increased by 6% on Monday and 5% on Tuesday.

Meanwhile, U.S. stocks closed higher on Wednesday, partly due to the Trump administration’s commitment to stabilize the oil market and ease investor anxiety over Middle East conflicts.

The duration of the closure of the Strait of Hormuz is undoubtedly critical to the outlook for oil markets. Fitch Ratings recently stated that the closure is likely to be temporary and its impact on oil prices will be limited.

(Source: Cailian Press)