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The now closed Strait of Hormuz moves about 20 million barrels of crude oil and petroleum products daily, totaling about 20 percent of global demand.
DTN reports that fertilizer exports also move through the Strait, including about a quarter of the globally traded nitrogen market. Politico said the White House will offer naval escorts and political risk insurance for oil and gas tankers traveling through the Strait of Hormuz in a bid to slow down a surge in energy prices after Iran warned it will attack ships at a choke point in the Strait.
“The announcement brought some immediate relief to the overheated crude oil market,” Politico reported.
In a Truth Social post, President Trump said he’s ordered the U.S. Development Finance Corporation to provide risk insurance and guarantees for the financial security of all maritime trade, especially energy.
“If necessary, the U.S. Navy will begin escorting tankers through the Strait of Hormuz,” Trump added.
American Farm Bureau Federation President Zippy Duvall commented on potential fuel and fertilizer supply issues following military action in Iran.
“We are hearing a groundswell of concern from farmers facing increased volatility in fertilizer and fuel prices, as well as some reports of companies freezing fertilizer sales, at a critical time with planting season coming into full swing. History teaches us that energy market shocks quickly reach the farm gate and countries in and around the Persian Gulf account for a large share of fertilizer supplies our farmers rely on, so it’s a serious issue. We’ve alerted White House and congressional staff as we further investigate the situation, but price gouging should not be tolerated and it’s important for safe passage to be provided for these critical supplies.”
NAFB news service, AFBF news release
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