Harsett predicts Strait of Hormuz can be opened within two months

Summary

White House economic advisor Kevin Hassett predicted the Strait of Hormuz could reopen within two months, citing ongoing negotiations with Iran and a backup plan Unusual Whales. He stated that once passage is restored from its current level of just 10% of normal traffic, energy prices will fall rapidly HongKong Economic Journal. This statement comes as US and Iranian officials are set to meet amid a fragile ceasefire Dow Jones, and severe supply disruptions have caused a significant oil market deficit, particularly in Q2 Reuters. The closure has prompted companies like Mazda to halt regional exports and Europe to warn of a potential jet fuel crisis Simplywall+ 2.

Impact Analysis

This is the White House trying to manage sentiment, not providing a hard forecast. Hassett’s “two months” timeline is an attempt to jawbone oil prices down and calm markets ahead of critical US-Iran talks this weekend Dow Jones. But don’t mistake talk for reality. The physical market is screamingly tight—traffic is at 10% of normal, analysts see a 3 million barrel-per-day deficit this quarter, and Europe is facing a jet fuel crisis HongKong Economic Journal+ 3.

They want you to focus on a potential resolution, but the real story is the immediate supply shock. Analysts are skeptical the talks will yield more than the status quo Dow Jones. A bad outcome could easily send oil prices spiking again. Bottom line: Hassett’s comments are cheap insurance for the administration, but they don’t add physical barrels to the market. The risk remains firmly skewed to the upside for oil. I wouldn’t be shorting energy here; this is a time to be long the physical reality, not the political hope.