Oil tankers transiting the Strait of Hormuz at night under a star-filled sky
President Trump has announced that a peace deal with Iran is imminent, a development that has sent shockwaves through global markets. In a series of Truth Social posts, the President declared that “Discussions and final points have been, in both concept and great detail, approved by all parties involved,” including the United States, Israel, Iran, and Gulf states. He further stated that “The Strait will officially open as soon as we sign, which could be soon. Very soon, maybe over the weekend in Europe.” This news has led to a surge in stock markets and a fall in oil prices, with the President noting that the “Naval Blockade will remain in full force and effect until this Transaction is finalized.”
While the diplomatic efforts are commendable, skepticism remains regarding Iran’s commitment to the agreement. Just yesterday, the United Nations’ nuclear watchdog criticized Iran for failing to allow inspections of its weapons and enriched uranium, a recurring issue. President Trump’s deal is expected to demand complete denuclearization, an end to uranium enrichment, the reopening of the Strait, and an end to Iran’s state sponsorship of terrorism. This aligns with President Reagan’s philosophy of “trust but verify” and the belief in “peace through strength.”
Meanwhile, a less-reported but significant development is President Trump’s clandestine operation to move oil tankers through the Strait of Hormuz. According to administration sources and oil watchdogs, approximately 200 ships, carrying about 100 million barrels of oil, transited the strait last month. This translates to roughly 3 million barrels per day, a substantial amount given the global supply and demand equilibrium of 100 million barrels per day. The prior closure of the Strait had removed approximately 20 million barrels per day from the market, leading to soaring oil prices.
The operation, described by Trump as “quietly at night” with “the lights turned off” and radar disabled, has seen a significant increase in daily transits. Current estimates suggest that a dozen ships per night are being moved, potentially adding up to 180 million barrels per month, or about 6 million barrels per day. This influx of oil supply is helping to alleviate the 20 million barrel shortfall and is credited with bringing down oil prices. The continued success of this operation could lead to lower gasoline prices, provide a silver lining to the temporary inflation bulge, strengthen the stock market, and potentially soften interest rates over time. This intricate maneuver, dubbed “Trump’s secret sauce,” highlights a bold and unconventional approach to international diplomacy and energy markets.
About the Author
