U.S. Energy Secretary Chris Wright disputed claims that Strait of Hormuz tanker traffic has collapsed, telling Fox News the real shortfall in oil flows is smaller than headline numbers suggest. He pointed instead to refining capacity, not crude supply, as the market's real bottleneck, while fresh inflation data cooled expectations for a Federal Reserve rate hike.
U.S. Energy Secretary Chris Wright pushed back on the idea that a drop in tanker traffic through the Strait of Hormuz points to a supply crisis, telling Fox News's Bret Baier the shortfall is smaller than it looks.
Wright disputes the Hormuz traffic numbers
Baier pressed Wright on tanker counts that fell from more than 100 vessels a day before the conflict to just 14 on Monday and 14 on Tuesday. Wright said the U.S. tracks every ship transiting the strait even though most vessels now run dark with their transponders switched off.
Wright said: "it's a much smaller hole than people think it is". He put flows out of the Arabian Gulf at 14 million to 15 million barrels a day, versus roughly 20 million barrels a day before the conflict, citing eight or nine million barrels a day moving through the strait itself plus six million barrels a day diverted via pipelines. Reuters also reported that Defense Secretary Pete Hegseth said the U.S. can maintain naval pressure on Iranian ports indefinitely, rotating ships as needed.
Refining capacity, not crude supply, is the strain point
Wright told Baier the real pinch is refining capacity worldwide rather than crude delivery, and said Ukrainian strikes on Russian refineries are cutting into refined product supply. Crude was trading near $81 a barrel, with the national average gasoline price around $4.07 a gallon when Baier raised the numbers.
The administration's goal remains driving gasoline back toward $3 a gallon, though Wright gave no timetable for reaching it.
Cooling inflation data reinforces the demand outlook
The Producer Price Index was flat in July, below the 0.2% increase economists had expected, while its annual rate cooled to 4.7% from 5.5% in June. Core PPI rose just 0.2% and eased to 4.2% annually from 4.7%, as wholesale energy prices dropped 3.1%, including a 5.7% slide in gasoline.
Consumer prices told a similar story: the Consumer Price Index rose 0.1% in July, and core CPI cooled to 2.5% year-over-year from 2.6%. Cooling inflation has cut the odds of a Federal Reserve rate hike at its September meeting, which the report ties to a steadier energy demand outlook.
Source: Commodities Analysis & Opinion
Trading involves risk.
Risk Disclaimer
