Oil prices fell sharply Tuesday, after Secretary of Energy Chris Wright said in a social media post that the U.S. Navy had successfully escorted a tanker through the Strait of Hormuz.
But the post appeared to have been subsequently removed. CNBC has reached out to the Department of Energy and White House for comment.
U.S. crude oil was last down 10.55% at $84.77 per barrel by 2:24 p.m. ET. Brent crude, the global benchmark, was trading 9.4% lower at $89.66. Prices fell more than 17% immediately after Wright’s post.
“The U.S. Navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to global markets,” Wright said in the post, which is no longer available to view.
Emergency stockpile meeting
The International Energy Agency will hold an extraodrinary meeting on Tuesday to discuss a possible release of emergency stockpiles. The more than 30 members states are advanced economies in Europe, North America and Northeast Asia. They collectively hold 1.2 billion barrels of oil in reserve.
The Iran war has triggered the biggest supply disruption in the history of the oil, according to an analysis by Rapidan Energy. Saudi Aramco’s CEO warned that the war will have “catastropic consequences” for the market.
“While ​we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced,” Aramco CEO Amin Nasser said Tuesday.
Oil prices year-to-date
President Donald Trump warned Monday that Iran would be hit “twenty times harder” if it attempted to halt oil flows through the critical Strait of Hormuz. Traffic through the Strait has been severely disrupted as oil shippers fear attacks by Iran, keeping ships at anchor.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” Trump said in a post on Truth Social.
Located between Oman and Iran, the Strait is a vital transit route for global energy markets. Roughly 13 million barrels passed through the waterway in 2025, accounting for about 31% of global seaborne oil flows, according to Kpler. It connects major Gulf producers including Saudi Arabia, Iran, Iraq and the United Arab Emirates to the Gulf of Oman and the Arabian Sea.
Traders bet on traffic resumption
For now, markets appear to be betting the situation cannot last long and that navigation through the Strait will ultimately be restored, said Bob McNally, president at Rapidan Energy Group.
“I think there’s a lot of optimism in the market,” McNally said. “We saw that today with the collapse in oil prices on what we used to call verbal intervention from the president.”
The market is still struggling to process the scale of the disruption, McNally said. Traders assumed for decades that no country would be allowed to shut the Strait. The fact that it has happened at all is “completely calamitous and unexpected,” the analyst said.
While Trump’s comments have lifted markets, Andy Lipow, president of Lipow Oil Associates, said it was too early to draw concrete conclusions.
“We will have to wait and see how Iran responds to the President’s comments and whether or not Iran will attack any oil infrastructure in the coming hours,” he said.
— CNBC’s Emma Graham, Eamon Javers, and Joseph Wilkins contributed to this report.
