New York (AFP) – The United States will spare Iran’s energy infrastructure as it wages war with Israel against the Islamic republic, Energy Secretary Chris Wright said Sunday. With oil prices rising dramatically, he told CNN that disruptions to the petroleum and gas industry will be short-lived — “worst case, that’s a few weeks. That’s not months.”
Israel attacked oil storage facilities Saturday in and around Tehran, sparking huge fires in the first such attacks reported since the war started last weekend. Wright seemed to downplay them. “These are Israeli strikes, these are local fuel depots to fill up the gas tank,” Wright said. He added: “The US is targeting zero energy infrastructure. There are no plans to target Iran’s oil industry, their natural gas industry, or anything about their energy industry.”
The war has all but shut down the Strait of Hormuz, through which nearly 20 percent of the world’s crude oil and about 20 percent of liquefied natural gas usually transit. Energy markets have been riled by this disruption and oil prices shot up. West Texas Intermediate, the US benchmark for oil, rose 12 percent just on Friday and is up 36 percent in a week. “They shouldn’t go much higher than they are here because the world is very well supplied with oil,” Wright told CBS. “There’s no energy shortage in all of the Western hemisphere.”
US insurer AAA said US gasoline prices at the pump have gone up 16 percent in a week and diesel by 22 percent. The website GasBuddy says diesel fuel, used extensively in trucking, had not been this expensive since February 2023. Gasoline prices are closely watched in this country where cars are king and they could become a factor as America heads toward mid-term elections in November. Trump’s approval rating was low even before the war.
“What you’re seeing is emotional reactions and fear that this is a long-term war,” Wright said on CBS. “This is not a long-term war.” He said the United States is now talking with shipping companies eager to get their vessels out of the Gulf. “Early tankers probably will involve some direct protection by the US military” to get through the Strait of Hormuz, he said, adding that he thinks traffic will return to normal “relatively soon.”
Iran accounts for about four percent of world oil production, according to the US Energy Information Administration. Its oil industry is subject to international sanctions but some is still exported, mainly to China, oil industry data shows. US Treasury Secretary Scott Bessent said Friday the government was considering lifting sanctions on more Russian oil, a day after it temporarily authorized India to buy from Moscow as global oil prices surged.
The US International Development Finance Corporation also said Friday it is creating a reinsurance mechanism of up to $20 billion to cover risk associated with travel through the Strait of Hormuz.
© 2024 AFP
