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strikeApr 30, 2026

The Trump Administration Floats a New Idea to Reopen the Strait of Hormuz. Here's What It Could Mean for the Energy Market. | The Motley Fool

Summary

The Trump administration is seeking to build an international coalition to help restore freedom of navigation in the Strait of Hormuz. The Maritime Freedom Construct (MFC) would be a joint initiative between the State Department and Pentagon. It aims to help restore ship traffic through the Strait. Here's a closer look at the proposed initiative and what it could mean for the global energy market. Restoring the freedom of navigation The Strait of Hormuz is a crucial waterway. Before the war, 20% of global oil and liquified natural gas (LNG) supplies moved through the Strait each day. However, traffic has slowed to a trickle due to Iran's attacks on ships trying to move through the Strait and laying sea mines. That has caused a massive disruption to global energy supplies. While Iran initially agreed to reopen the Strait following a ceasefire, it reneged after the U.S. Navy continued its blockade of Iranian-linked ships. That's leading the Trump administration to seek out alternative ways to reopen the Strait. U.S. Secretary of State Marco Rubio approved the creation of the MFC as a "critical first step in the establishment of a post-conflict maritime security architecture for the Middle East." The State Department would serve as the diplomatic hub between partner countries and the shipping industry, while the Pentagon would coordinate real-time maritime traffic and communicate with vessels transiting the Strait. The State Department is asking for other countries to participate through diplomacy, information sharing, sanctions enforcement, naval presence, or other forms of support. Time is ticking Reopening the Strait to commercial traffic is crucial to the global economy. Its continued closure would likely cause oil prices to rise even further and remain elevated long after it reopens due to the time required to restore shut-in production and rebuild global inventories. JPMorgan recently warned that oil could top $150 a barrel if supply flows through the Strait remain disrupted through mid-May. Higher oil prices will eventually slow the global economy, risking a recession later this year. Even if the latest U.S. initiative is successful in restoring ship traffic in the Strait, oil prices will likely remain elevated this year. JPMorgan's base case is that the Strait reopens through negotiations well before mid-May. Under this scenario, oil would remain above $100 throughout the second quarter before moderating in the second half of this year. Goldman Sachs has a similar base forecast. It assumes flows through the Strait fully normalize by the end of June, which should push oil below $90 by the end of this year. Still, even under these rather optimistic scenarios, oil prices will remain high for the rest of this year. That will benefit oil stocks. NYSE: COP Key Data Points U.S. oil and gas giant ConocoPhillips (COP 1.37%) reported better-than-expected first-quarter results today, generating $1.89 per share of adjusted earnings, beating the $1.68 per share consensus estimate. While the war impacted its LNG production in Qatar (which it expects will continue through the entire second quarter), it reported significantly higher earnings and cash flow than in the fourth quarter. If oil averages $80 this year, it will produce over $25 billion in cash flow from operations. That's well above its initial expectations that oil would average around $60 a barrel, enabling it to produce less than $20 billion in cash. The company is reinvesting about $500 million of that windfall to drill more wells in the Permian Basin this year, boosting oil supplies. It could eventually return more cash to investors through additional share repurchases. A new approach to reopen the Strait The U.S. is working to reopen the Strait of Hormuz without lifting the Navy blockade of Iran. The joint global initiative would help restore the free flow of commercial traffic in the crucial waterway. It's a potentially important step toward restoring normalcy to global energy markets, but it will take time. As a result, oil prices will likely remain elevated for the rest of this year, enabling oil companies like ConocoPhillips to generate a lot more cash than they initially anticipated. That makes oil stocks look like a solid investment opportunity right now, as they should continue to cash in even if the U.S. is successful in reopening the Strait.

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  • Matt DiLalloBy Matt DiLallo

    The Trump administration is seeking to build an international coalition to help restore freedom of navigation in the Strait of Hormuz. The Maritime Freedom Construct (MFC) would be a joint initiative between the State Department and Pentagon. It aims to help restore ship traffic

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strikeUnverifiedUSIsraelIran
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US and Iran trade strikes as tensions escalate amid renewed conflict - US Central Command has struck three Iranian oil tankers, including one near the Kharg Island export hub, after Iran's Islamic Revolutionary Guard Corps fired ballistic missiles at two US Navy vessels.

- Admiral Brad Cooper declared that the US would exact a higher economic cost for attacks on its ships, confirming that no American personnel were harmed during the strike. - Iran's Revolutionary Guard retaliated by threatening further attacks on US military ships, claiming to have targeted three US-linked vessels and three tankers navigating unauthorised routes in the Strait of Hormuz.

- The Iranian Red Crescent has requested an International Criminal Court investigation into a suspected US strike on an Iranian wedding that left at least five people dead, accusing Washington of war crimes. - The recent exchanges represent a dangerous deepening of the wider conflict between the US, Israel, and Iran, which has flared repeatedly since initial strikes in February.

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strikeUnverifiedUSIsraelIran
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Iran said its forces attacked a US naval drone trying to enter the Strait of Hormuz, hours after targeting ships in retaliation for American strikes on three oil tankers. The latest round of clashes, which began with US raids last week, comes amid a deadlock in their six-month war.

Iran has maintained its stranglehold on the strategic Strait of Hormuz while Washington continues a counter-blockade of Iranian ports. Washington is also seeking to choke Iran's economy, rolling out sanctions on entities with financial links to the Islamic republic in a bid to force it into submission.

The Islamic Revolutionary Guard Corps, the ideological arm of Iran's military, said today that it "attacked an American military unmanned surface vessel" attempting to enter the strait, according to a statement carried by state television. Hours earlier, the IRGC said its naval forces "targeted three oil tankers on the unauthorised route of the Strait of Hormuz and three vessels affiliated with the child-killing America in other areas".

It warned ships not to attempt to transit by unapproved routes. Yesterday, US Central Command (CENTCOM), which oversees American military operations in the region, said it struck tankers linked to the Iranian Guards, accusing the most powerful arm of the Iranian military of unsuccessfully firing at American warships.

"Following Iran's failed attacks, CENTCOM permanently disabled the IRGC crude oil carriers M/T Downy off the coast of Kharg Island and M/T Stark 1 near Jask," it said. "American forces also completely destroyed the unladen crude oil carrier M/T Kylo ...

in the Gulf of Oman, striking the vessel in multiple critical locations to render it inoperable after the crew was directed to abandon ship," he said. Video posted by CENTCOM showed large fireballs and billowing flames after projectiles slammed into the ships.

The three vessels were "part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies", it said. 'Higher economic cost' The IRGC meanwhile claimed the two American warships they targeted had been "forced to retreat" after "suffering damage", but CENTCOM said those ships successfully evaded Iranian attacks.

CENTCOM commander Admiral Brad Cooper said after the operation: "If you shoot at two of our ships, we will impose an even higher economic cost - taking out three of yours." The Iranian foreign ministry hit out at Washington over the strikes on oil tankers, calling them "illegal and aggressive actions".

A correspondent for Iranian state TV in Jask in the southern province of Hormozgan said one of the tankers was empty and the second was carrying oil. The crews were transported to shore on lifeboats, they said. Another state TV correspondent on Kharg Island said the attack there caused no casualties.

Iran's Khatam-al Anbiya central military command warned that if the US continued its attacks, then Tehran's retaliation against US warships would be "more severe than before, and there is a possibility of their expansion". The administration of US President Donald Trump has tried to downplay the significance of the six-month conflict, which has proven increasingly unpopular at home as midterm elections near.

US Vice President JD Vance went so far as to say that he "wouldn't call it a war". Mr Trump reiterated that view on Friday, calling the war "small potatoes" for Washington. Iran's Security Chief Mohsen Rezaei warned this week that the Islamic republic had adopted a "new strategy" against Washington that "will shatter your foundations".

The US has been trying to step up pressure on Tehran in a bid to wrestle control of the Hormuz strait, through which one-fifth of world oil supplies previously flowed. A fragile ceasefire between the two sides collapsed in July after attacks on commercial ships in the strategic waterway.

Mr Trump has in recent weeks repeatedly threatened to claim sovereignty over the strait, even posting a map showing it as "new US territory". Mr Vance has insisted the US will not reopen talks with Iran until it ends attacks on commercial shipping in Hormuz.

strikeUnverifiedUSIsraelIranUN
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CAIRO (AP) — Iran said Sunday it struck an unmanned U.S. vessel trying to enter the Strait of Hormuz, the latest salvo in a new flare-up of fighting between the two countries. The U.S. did not immediately confirm the purported attack, which came a day after the U.

S. military said forces struck three Iranian oil tankers in response to a missile attack on Navy warships. The war began with U.S. and Israeli attacks on Iran on Feb. 28. But since a ceasefire agreement was announced in June, on-and-off fighting has persisted with both sides trying to inflict military and economic pain as negotiations have collapsed.

Strikes come about a week after fighting resumed The U.S. and Iran resumed attacks last week, following a month of relative calm, with the Strait of Hormuz and Iranian communities along it again being targeted. At least five people were killed earlier in the week during a U.

S. bombardment of southern Iran. The Trump administration appears to have adopted a dual-prong approach to the conflict, responding militarily to attacks on the strait while going after foreign financial institutions that handle Iran’s money.

But Tehran's hard-line new senior leaders have signaled the willingness to dig in after weathering decades of sanctions. Iran has found ways over the years to circumvent sanctions, and now the U.S. blockade, and get its oil to buyers to help ease growing economic pressures.

That relies in part on a shadow fleet transporting its oil. Meanwhile, Iran's nuclear program, the issue that contributed to the outbreak of the war, was meant to be addressed in negotiations that fell apart soon after the U.S. and Iran signed a memorandum of understanding in mid-June.

Diplomats say the U.S., Britain, France and Germany seek to refer Iran to the U.N. Security Council for failure to comply with its nuclear nonproliferation obligations. Instead, Tehran's new leverage focuses on the Strait of Hormuz that is crucial to global oil and natural gas shipments and was seen as an international waterway before the war began.

___ Magdy reported from Cairo and Frankel reported from Jerusalem.

strikeUnverifiedUSIran
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Iran attacks naval drone near Hormuz after US strikes 3 oil tankers The latest round of clashes, which began with US raids last week, comes amid a deadlock in the six-month war Iran said on Sunday that its forces attacked a US naval drone trying to enter the Strait of Hormuz, hours after targeting ships in retaliation for American strikes on three oil tankers.

The latest round of clashes, which began with US raids last week, comes amid a deadlock in their six-month war. Iran has maintained its stranglehold on the strategic Strait of Hormuz while Washington continues a counter-blockade of Iranian ports. Washington is also seeking to choke Iran’s economy, rolling out sanctions on entities with financial links to the Islamic Republic in a bid to force it into submission.

The Islamic Revolutionary Guard Corps, the ideological arm of Iran’s military, said on Sunday it “attacked an American military unmanned surface vessel” attempting to enter the strait, according to a statement carried by state television. Hours earlier, the IRGC said its naval forces “targeted three oil tankers on the unauthorised route of the Strait of Hormuz and three vessels affiliated with the child-killing America in other areas”.

Location: Iran