Energy Secretary Chris Wright has a new estimate for when the Strait of Hormuz, currently closed due to Iran's ceasefire with the U.S., will start letting traffic through again: “sometime this summer at the latest.” That's the kind of precise deadline that makes calendar manufacturers nervous.
Speaking Friday at a new liquefied natural gas facility in Cameron, La., on CNBC's “Squawk Box,” Wright noted that the U.S. is “continuing to ramp up U.S. natural gas exports” with 2.5 billion cubic feet of gas export (bcf) capability being added per day - even though it lost 10 bcf a day thanks to the “temporary interruption” of the Strait's closure. Simple math suggests that's a net negative, but who's counting?
“Now, traffic will be flowing through the Straits of Hormuz, you know, as soon as we can, but certainly sometime this summer at the latest,” Wright said, adding that a deal could come “in the next few days.” He also warned that if Iran “continues to hold the world economy hostage, the United States military will force the reopening of the Straits of Hormuz, but that's not trivial to do.” Wright noted that the U.S. has “done the early steps on that, but [what's] better is to get a deal and not have to use military force.”
When asked who is “in charge” of Iran - amid reports that Supreme Leader Mojtaba Khamenei may be incapacitated or dead - Wright acknowledged, “We don't know for sure, so yes there is confusion, there is fraction among the regime, all of this could ultimately lead to change in regime in Iran, which would be just enormously beneficial for the region, for the United States and, of course, for the 90 million-plus Iranians.”
Wright previously said he was “avoiding” predictions on oil and gasoline prices while the U.S. is in a “negotiating period.” He told NBC News on Sunday, “We're using economic leverage against Iran, and this regime is trying to cling on to their nuclear program, so obviously this part of the conflict has gone a little longer.” In March, he optimistically predicted gas would drop under $3 by summer - back when the national average was nearly $3.60. By April, he suggested prices might not fall below $3 until 2027, a forecast President Trump called “totally wrong.”
The national average now stands at $4.53, according to AAA. Trump this week proposed a moratorium on the federal gas tax (currently 18.4 cents per gallon) for relief. House Democrats warn that eliminating it could undermine the Highway Trust Fund and infrastructure projects, with no guarantee savings reach consumers. Their suggestion: end the conflict instead. Novel idea.