U.S. oil and gas executives expect traffic through the Strait of Hormuz to be constrained through August — with little change in U.S. crude output to offset the drop in Middle East oil, according to a survey conducted by the Federal Reserve Bank of Dallas.
Most of the executives in the survey released Thursday also said they expect shipping costs for oil from the Persian Gulf to rise even after the U.S. war with Iran ends due to higher insurance rates and tolls.
The results indicate the oil and gas industry is skeptical of the Trump administration’s assurances that the Strait of Hormuz, a critical chokepoint for about 20 percent of the world’s global oil deliveries that Iran has effectively closed, will soon reopen — or that oil markets will quickly return to normal after that. U.S. benchmark crude prices were $94 a barrel Thursday, almost $30 higher than when the bombing started nearly two months ago.
Anonymous responses to the survey from 116 executives in the Dallas Fed’s district of Texas, southern New Mexico and northern Louisiana — the heart of the U.S. energy industry — captured the sector’s rising frustration with the Trump administration over the uncertainty and increased shipping costs fomented by the conflict.
