Gas Prices SOAR As Trump Floats TROOPS In Hormuz Strait

Former President Trump announced an immediate order for the US Development Finance Corporation to provide political risk insurance and guarantees for maritime trade, especially energy, through the Gulf. He also stated the US Navy would begin escorting tankers through the Strait of Hormuz as soon as possible to ensure the free flow of energy.

Trump's statement on Truth Social was quoted: 'Effective immediately, I've ordered the US Development Finance Corporation to provide at a very reasonable price political risk insurance and guarantees for the financial security of all maritime trade, especially energy traveling through the Gulf... If necessary, the US Navy will begin escorting tankers through the Straight of Hermoose as soon as possible.'

Following Trump's announcement, crude oil prices surged above $77 a barrel, reaching their highest level since January 21st, 2025, the day after his inauguration. This erased the entire oil price decline that had occurred under his presidency.

The host states: 'crude oil prices surge above $77 a barrel to their highest level since January 21st, 2025, one day after President Trump's inauguration.' A 'Kobes letter' on X noted: 'the entire oil price decline under President Trump has now been erased.'

The global reinsurance market, which underpins shipping insurance, immediately ceased backing tankers in the Strait of Hormuz once Iran threatened its closure. This created a vacuum, as massive oil tankers rely on this insurance to operate, making Trump's government-backed insurance offer a direct response to this market failure.

The guest explains: 'reinsurance basically runs the world... the reinsurers once Iran said the straight of Hormuz is closed said, 'Forget it.' Like we're not we're not backing these up.' He adds that Trump's plan uses 'our own basically tax dollars through this development finance corporation to to offer the insurance itself.'

Despite Trump's declaration, the US Navy subsequently indicated a lack of significant capacity to undertake widespread escorting duties for commercial tankers, creating a discrepancy between the announced policy and operational reality.

The guest states: 'Now the Navy has subsequently said, 'Actually, we don't really have a whole lot of capacity to do this escorting.''

The geopolitical tensions and market uncertainty quickly extended beyond crude oil. Qatar Energy announced a halt in downstream production, and a Qatari aluminum smelter (Cathalum) began shutting down, leading to a force majeure declaration by shareholder Norse Hydro. This illustrates how disruptions in critical regions can cascade through various industrial sectors.

The host mentions: 'Cutter Energy to stop downstream production... Cutter smelter shutdown exacerbates Iran war aluminum fears.' The guest confirms: 'So, this is the way that things cascade through the economy.'

The escalating tensions and lack of a clear 'regime change plan' from the US contributed to significant volatility in global markets. South Korean markets experienced a massive sell-off, hitting circuit breakers, and other Asian markets also declined. This highlights the extreme fragility of the global economy when faced with geopolitical uncertainty and leveraged positions.

The guest notes: 'the South Korean uh market... had an absolutely massive um sellout selloff. uh hit one of those circuit breakers... You've you've had other As other Asian markets um selling selling off as well.' The host adds: 'there is no regime change plan... the certainty for people who are trading and trying to make financial decisions here is absent.'