Trump’s Hormuz Toll Could Upend Global Energy Trade
Dangote's Dollar Shift Reveals Nigeria's Bigger Oil Problem Leon Stille has a background in energy sciences (MSc and BSc) and is pursuing a PhD in energy policy.
He currently runs his own company,… A proposed 20% charge on cargo passing through the Strait of Hormuz would violate the basic principles of international navigation, raise energy costs and undermine the stated purpose of restoring stability.
It could also do more to accelerate the global energy transition than many conventional climate policies.
Donald Trump’sproposalto charge ships 20% of the commercial value of cargo passing through the Strait of Hormuz is difficult to understand as an energy policy.
The disruption of the strait has already driven up oil and gas prices, increased insurance premiums and forced governments to search for ways to restore normal trade.
The apparent objective of months of military and diplomatic activity has been to reopen one of the world’s most important energy corridors and prevent a regional conflict from becoming a global economic crisis.
Imposing a charge equivalent to one-fifth of the cargo’s value would achieve almost exactly the opposite.
It would transform a temporary geopolitical disruption into a permanent structural cost, replacing the risk of an Iranian blockade with an American toll that could be just as damaging to energy markets.
After spending enormous political, military and financial resources trying to preserve freedom of navigation, Washington would effectively begin charging the world for the freedom it claims to have restored.
The idea is legally questionable, economically incoherent and strategically dangerous.
From the perspective of the energy transition, however, it may be one of the most consequential policies the Trump administration has proposed.
A Toll Measured in Hundreds of Millions Per Day Before the conflict, approximately 21 million barrels of oil and petroleum products passed through the Strait of Hormuz each day.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
Comments
Post a Comment