Donald Trump’s economic adviser, Kevin Hassett, has said that the Strait of Hormuz could reopen and that oil supplies could return to normal within the next two months, with hopes of reconciliation between the US and Iran before June.
“There’s going to be, you know, a rapid reduction in energy prices once we get the Strait open,” Hassett told Fox Business Network.
“Once the energy prices start to come down, don’t forget that that will put downward pressure on inflation and…I think that the outlook for the Fed having the room to cut rates is going to be very solid,” he said.
Hassett had earlier claimed some wins for the White House, citing drops in the price of eggs, beef and concert tickets.
Strait of Hormuz status
More than 100 commercial vessels, mostly oil tankers, were passing through the strait each day before the US-Iran war started on February 28, according to data from Kpler. That has reportedly gone down to single digits.
Despite the start of a ceasefire on Tuesday that Washington said is conditional on resumed flows, just nine ships have been observed passing through the strait since Thursday morning, with five exiting the Persian Gulf and four entering.
The Iranian transit and the distinct lack of movement of other vessels demonstrate just what a grip Iran has on Hormuz and Tehran’s ability to control what passes through a vital strip of water to the world economy.
“Iran is doing a very poor job, dishonorable some would say, of allowing Oil to go through the Strait of Hormuz. That is not the agreement we have! You’ll see Oil start flowing, with or without the help of Iran and, to me, it makes no difference, either way,” Trump said in a Truth Social post on Thursday.
Inflation in the US
Inflation in the United States rose sharply in March, government data showed, as higher energy prices due to the war in West Asia hit Americans hard.
The nationwide sticker shock put pressure on President Donald Trump, who has ordered peace talks with Iran and faces midterm elections in November.
The rate of inflation rose to 3.3 per cent year-on-year in March, according to the US Bureau of Labour Statistics (BLS). By comparison, this same consumer price index (CPI) was 2.4 per cent year-on-year a month earlier.
Gasoline prices surged by 21.2 per cent between February and March — the largest monthly increase since the government began publishing a related index in 1967, the US Bureau of Labour Statistics (BLS) said.
