Removal of mines from the critical oil shipping route reduces geopolitical risk premium in crude markets.
US President Donald Trump announced the US Navy has cleared all mines from the Strait of Hormuz, a key chokepoint for global oil shipments. The move eliminates a major supply disruption risk that had kept markets volatile amid tensions with Iran.
The Strait of Hormuz handles about one-fifth of the world’s oil trade. Prior incidents, including tanker attacks and mine-laying accusations, had driven crude prices higher in recent months. Analysts had warned of potential spikes if the waterway faced prolonged disruptions.
Trump warned Iran against further mine-laying, stating any new attempts would be met with force. The US is monitoring the strait via Space Force and Iranian nuclear sites, he added. The USD strengthened against the Japanese Yen following the announcement.