Oil prices first decline after the outbreak of the US-Iran war: Bezent promises to escort the Persian Gulf, hinting at more measures to come

Since the conflict between the U.S. and Iran, international oil prices have fallen for the first time, ending a streak of two consecutive trading days with gains totaling over 11%.

According to CNBC, on Wednesday, U.S. Treasury Secretary Janet Yellen stated that the White House will gradually introduce a series of measures to support oil tankers passing through the Persian Gulf. Boosted by this news, market concerns about supply disruptions eased, and oil prices turned downward. As of press time, WTI crude oil fell 1.48% to $73.46 per barrel; Brent crude dropped 1.3% to $80.34 per barrel.

Earlier, the U.S. and Israel launched a large-scale airstrike against Iran last weekend. Iran responded with missile and drone attacks on multiple targets across the Middle East, including energy infrastructure. This impact pushed WTI crude close to $78 per barrel on Monday, with gains of 6% and 5% on Monday and Tuesday, respectively.

Yellen commits to series of safeguards, market sentiment stabilizes

The immediate trigger for the recent decline in oil prices was Yellen’s clear statement on CNBC’s Squawk Box on Wednesday. She revealed that the White House will issue a series of announcements to ensure the safety of oil transportation in the Persian Gulf. She said:

“We will issue a series of announcements. Yesterday, we announced that the U.S. International Development Finance Corporation (DFC) will provide insurance for oil tankers and cargo ships operating near the Persian Gulf last weekend.”

This policy signal aligns with President Trump’s remarks on Tuesday. Trump stated that the U.S. would provide insurance for tankers through the DFC and, if necessary, offer naval escort for Persian Gulf oil transportation. These statements together helped stabilize market sentiment, leading to a decline in oil prices.

Strait of Hormuz stalemate poses critical test for global oil markets

The core of this volatile oil price movement is the security of passage through the Strait of Hormuz. As the world’s most vital oil trade chokepoint, the strait accounts for about 20% of global oil consumption and exports. Due to fears of retaliation from Iran, shipping through the strait has effectively stalled. If the blockage persists long-term, the impact on global energy supply could be severe.

To restore market confidence and resume tanker traffic, the U.S. government has taken dual measures: providing insurance for tankers via the U.S. International Development Finance Corporation (DFC) and promising naval escort if needed.

However, Iran’s counterattacks continue, and the geopolitical situation remains highly uncertain. While short-term sentiment has been boosted by policy signals, the risk of market volatility remains high.

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