Dr. Carole Nakhle, CEO of Crystol Energy, joined Bloomberg with Tom Mackenzie, Lizzy Burden and Anna Edwards to discuss President Trump’s proposal to provide insurance and naval escort for shipping through the Strait of Hormuz, and what it could mean for oil markets.
In the interview, the discussion explains why the initial price relief was short lived and why market attention still centres on escalation risks. The analysis highlights that protection measures can reduce fear but may not remove operational risk, especially if conflict expands and attacks spread to energy infrastructure in neighbouring producers.
Key takeaways:
Naval escort and political risk insurance can ease pressure, but practical implementation and appetite to sail remain uncertain.
Even if tanker traffic resumes, a return to normal conditions looks unlikely while drones and strikes remain a threat.
The most worrying scenario comes from attacks on regional energy infrastructure and the risk of GCC countries being drawn into the conflict.
A two tier market for flows looks hard to enforce, because risk in a narrow waterway affects shipping behaviour more broadly.
Oil prices show a justified risk premium, but the market is not in panic because a large global deficit is not yet evident.
Supply cushions exist, including potential production response outside Opec plus and emergency stock releases if disruptions intensify.
Some sanctioned barrels could add flexibility at the margin, which may help limit panic even if it does not solve logistics.
Alternative routes and regional land infrastructure can divert several million barrels per day, but ramp up takes time and demand may soften as prices rise.
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