Crude Sinks To $79 As US Navy Escorts Oil Tanker Through Strait Of Hormuz For First Time

Crude oil extended Tuesday’s sharp selloff after U.S. Department of Energy Secretary Chris Wright announced on X that the U.S. Navy had successfully escorted an oil tanker through the Strait of Hormuz.

The escort marked the first confirmed commercial transit of the global energy chokepoint since the Iran conflict began on March 1.

“President Trump is maintaining stability of global energy during the military operations against Iran,” Wright posted, adding that the Navy mission was designed to ensure oil remains flowing to global markets.

West Texas Intermediate crude – as tracked by the United States Oil Fund (NYSE:USO) – slipped to below $80 a barrel by 1:26 p.m. in New York, down nearly 33% from the $119 peak reached Sunday night, marking one of the most dramatic reversals in oil markets since the pandemic-era crash of April 2020.

On Monday, President Donald Trump signaled the conflict may be approaching its end, though Iranian authorities publicly stated their readiness to continue fighting.

The U.S. Navy’s ability to guarantee transit through the Strait of Hormuz — the chokepoint through which roughly 20% of global oil trade flows — directly addresses the supply-disruption premium that has dominated crude pricing since the conflict’s onset.

Signs The Military Threat Is Easing

Moreover, experts highlight that the intensity of Iranian military attacks have notably fallen in recent days.

A new analysis by economist Jacob Funk Kirkegaard shows the number of Iranian drone strikes targeting the Gulf region dropped sharply on Monday.

According to data compiled from UAE authorities, the number of daily drone attacks aimed at the country fell more than 80% to just 19, marking the first meaningful reduction in Iranian retaliation since the conflict began.

Ballistic missile attacks remained roughly stable, but the overall decline in drone activity could signal a lower immediate threat to shipping in the Strait of Hormuz, which sits between Iran and Oman.

If sustained, that reduction could allow Western naval forces to begin escorting commercial vessels through the waterway on a more regular basis.

“This is tentatively good news for the overall security situation in the Strait of Hormuz, and does as a ‘necessary but not sufficient condition’ potentially mark the first step towards improvement.”

Image: Shutterstock

This article Crude Sinks To $79 As US Navy Escorts Oil Tanker Through Strait Of Hormuz For First Time originally appeared on Benzinga.com