Oil prices just posted another healthy gain on Tuesday, with Brent crude climbing 2.45% to $102.57 a barrel and West Texas Intermediate rising 2.51% to $95.85. But here’s the thing that’s really driving these moves: nobody actually knows what’s happening with the U.S. coalition supposed to protect shipping through the Strait of Hormuz.
That uncertainty is pure gasoline for the market, literally and figuratively.
The Mixed Messages Keep Coming
The Trump administration is sending conflicting signals about what comes next in the Middle East. On one hand, Treasury Secretary Scott Bessent said the U.S. was letting Iranian oil tankers pass through the strait. On the other, Trump himself seemed to suggest the whole coalition thing wasn’t really locked in yet.
“Some are very enthusiastic, and some are less than enthusiastic,” Trump told reporters. “And I assume some will not do it.”
That’s not exactly the kind of clarity investors were hoping for. Saul Kavonic from MST Marquee put it well: the market is focusing on ground-level actions that keep looking escalatory, while getting mixed messages from Washington about how long this whole thing lasts.
A Coalition That Doesn’t Quite Exist Yet
Here’s where it gets interesting. The Wall Street Journal reported that the U.S. would soon announce a coalition to escort ships through the vital waterway. But “soon” apparently isn’t the same as “now,” and Trump’s frustration about reluctant allies suggests we’re still in recruitment mode.
He mentioned that some nations the U.S. has been protecting for “about 40 years at tens of billions of dollars” are still dragging their feet. That’s a pretty pointed reminder that military partnerships don’t automatically translate into shared sacrifice when things get uncomfortable.
The Insurance and Escort Problem
Warren Patterson, head of commodities strategy at ING, nailed the real issue here: insurance guarantees and naval escorts sound good in theory, but they haven’t actually happened yet. And there’s a practical reason why.
Escorting commercial vessels through the Strait of Hormuz puts naval ships in the crosshairs. The U.S. probably won’t go all-in on this until Iran’s ability to launch attacks gets significantly degraded. It’s a waiting game, and the market hates waiting games.
The Scale of This Disruption Is Staggering
The Strait of Hormuz handles roughly 13 million barrels per day, which represents about 31% of all seaborne crude flows globally. When Iranian attacks started disrupting traffic, it created one of the biggest disruptions to oil supply we’ve seen in modern history.
That’s not a rounding error. That’s the kind of supply shock that keeps traders awake at night and keeps prices elevated even when fundamentals might suggest otherwise.
What Happens When Nobody Commits?
The real tension here is that the market needs clarity, but the Trump administration seems more interested in negotiating who pays for what. Every day that passes without a functioning coalition is another day that shipping companies wonder if their vessels will make it through unscathed.
Energy traders know all this. They’re pricing in the risk that the coalition announcement gets delayed, that participation remains lukewarm, or that the naval escort idea never becomes reality. That’s why we’re seeing oil prices jump on what is essentially political uncertainty rather than actual supply disruption.
The question isn’t really whether the coalition will eventually form. The question is whether it will form in time to prevent further escalation and before the global economy fully prices in a persistent supply premium.
