Oil pares gains after White House pledge to protect Gulf shipping
Oil prices cooled on Wednesday, March 4, after the Trump administration vowed to safeguard maritime trade through the Gulf, easing fears of a prolonged shutdown of the Strait of Hormuz.
Navy escorts and insurance backstop
Oil prices pulled back on Wednesday, March 4, after the White House pledged to safeguard shipping through the Gulf, cooling markets that had surged earlier in the week amid disruption around the Strait of Hormuz.
President Donald Trump said the US Navy could begin escorting oil tankers through the Strait of Hormuz if needed, while directing the US International Development Finance Corporation (DFC) to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
Prices pull back, but nerves remain
After spiking earlier in the week amid tanker strikes and severe disruption to Hormuz traffic, crude prices moderated following the US announcement, with Brent easing back towards the low-$80s and US benchmark crude hovering in the mid-$70s in Wednesday trading.
A “geopolitical premium” shows up in the spread
Analysts said the move has helped cap the near-term surge, but markets remain on edge, with Brent continuing to command a wider premium over WTI, reflecting the higher geopolitical risk priced into global seaborne crude.
