You think he’s crazy….
World flocks to the US for oil as Trump’s war cuts off Hormuz
An armada of supertankers is sailing the Atlantic for supplies. It’s a double-edged sword
Donald Trump prepared for his war with Iran by dispatching what he described as “an armada”, seeking to intimidate the now-deceased ayatollah and his cronies with a floating display of American might.
He might not have expected another armada to return in the opposite direction within weeks of starting his bombing campaign.
Rather than military vessels, this new fleet is formed of supertankers, traversing the Atlantic in search of oil and gas that can no longer be collected from the Persian Gulf.
Iran has closed the Strait of Hormuz, shutting off key suppliers including the liquefied natural gas (LNG) superpower Qatar. Meanwhile, America has blockaded Iranian ports in the region.
The next best destination, shipping lines, traders and captains believe, is the Gulf of Mexico.
If they can pick up US hydrocarbons, grateful European and Asian customers will happily pay through the nose for supplies which replace those lost from the Middle East.
Oil is trading at close to $100 per barrel, up from around $70 before the war. Natural gas in Europe costs €45 (£39) per megawatt hour, an increase of nearly 50pc on pre-conflict prices.
But analysts say it is not clear whether the waterborne rescue mission will have much immediate impact.
Ronald Pinto at Kpler, an energy research group, says there is only “limited room” for America to increase exports.
“Not only in the US but also around the world, most LNG facilities are operating at very high utilisation rates at the moment,” he says.
“Those projects that have been adding capacity will be able to export more as that capacity is available. But there is not a lot of room from existing projects which are underperforming and can ramp up.”
He notes that Qatar supplied six to seven million tons of LNG per month before the war. Last month, US exports only increased by around half a million tons.
“It is true that gradually those exports from the US have been increasing in the last few months. But it is not at the same pace that we see the loss of Qatari supply,” says Pinto.
It leaves European and Asian buyers competing to buy those supplies, sometimes with vessels changing destination while at sea, as a new customer outbids the previous buyer.
A sanctioned Chinese tanker was turned back in the Strait of Hormuz by the US navy after Xi Jinping appeared to test Donald Trump’s blockade earlier this week.
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