US considering military support for Middle East oil and gas supplies

The Trump administration is considering providing military protection to oil and gas tankers traversing the Strait of Hormuz in a bid to cool energy prices that have surged since Iran warned it would attack ships at the choke point, two people said Tuesday.

“Military support for oil and gas supplies,” a person familiar with the discussion who was granted anonymity to discuss internal conversations said when asked about the potential for U.S. naval vessels to escort ships traveling through the strait. “It’s becoming a growing concern that the energy markets could face pressures in the coming days as the military campaign intensifies and expands in geographic scope. Access to the Straits of Hormuz is obviously vital for both natural gas and crude oil shipments, especially from Qatar and Saudi.”

U.S. oil prices have risen nearly $10 per barrel since the end of last week as the fighting has continued. That increase has started to filter down to gasoline prices, which are poised to climb higher than when President Donald Trump took office last year.

The administration is also considering potentially having the U.S. government back the insurance needed for tankers to continue traveling through the strait, said a third person familiar with the discussions. While the strait remains technically open, marine insurance companies are hiking rates and in some cases canceling coverage for tankers that traverse the area.

A former defense official familiar with the talks said the Pentagon is having ongoing discussions about a maritime mission that would closely resemble previous Defense Department operations in the Red Sea, where the U.S. deployed carriers and destroyers to the region in attempts to preserve freedom of navigation amid threats from an Iran-linked group.

"The President is meeting with his Energy and Treasury secretaries today, and they will have more to share after the meeting," a White House spokesperson said when asked about the options being discussed.

The talks are the first sign Trump is starting to take seriously the surge in oil, natural gas and road fuel prices that started after the start of the U.S.-Israeli attacks against Iran on Saturday that killed Iran’s supreme leader and sparked a war in the Middle East.

The widening war, which has resulted in six American service members killed and attacks against the U.S. embassy in Saudi Arabia, has made oil and gas facilities a major target for Iran. Qatar shut down a major natural gas export plant, Saudi Arabian fuel refineries have come under attack, and Iran has fired on ships traversing Hormuz, a major thoroughfare for 20 percent of the world’s waterborne oil deliveries.

The U.S. military says they have sunk 11 Iranian ships since the start of the joint operation with Israel on Saturday, meaning the mission is likely to focus more on intercepting Tehran’s missiles that could target civilian shipping traffic than deterring maritime incursions. That could put further pressure on U.S. stockpiles of air defense interceptors, which have already been run low from the campaign against Yemen’s Houthis and Israel’s 12-year war against Iran last year.

Secretary of State Marco Rubio said Monday that the administration would unveil a plan Tuesday to combat the rise in oil prices triggered by the U.S. military strikes against Iran. He did not divulge what those plans would be, only stating, “We're going to destroy their Navy.”

Felicia Schwartz and Zack Colman contributed to the report.