German chancellor Friedrich Merz on Tuesday urged President Donald Trump to bring the US war against Iran to a swift conclusion, citing its negative effects on oil and natural gas prices.
"This is, of course, damaging our economies — this is true for the oil prices and this is true for the gas prices as well," Merz told reporters during the televised portion of his meeting with Trump at the White House today.
"That's the reason why we all hope that this war will come to an end as soon as possible, and we are hoping that the Israeli and the American army are doing the right things to bring this to an end and to have, really, a new government in place who is coming back to peace and freedom," Merz said.
Trump downplayed the rise in oil prices during the press conference, and has indicated that the US campaign against Iran is still in the beginning stages.
"We have a little high oil prices for a little while, but as soon as this ends, those prices are going to drop, I believe, lower than even before," Trump said.
Germany has hailed Trump's decision to attack Iran and eliminate its leadership. But Trump did not publicly address Merz's entreaty to discuss "the day after" the war ends.
Ship traffic through the strait of Hormuz — the world's most critical oil and LNG shipping lane — has almost ground to a halt since US and Israeli forces struck Iran on 28 February, with only three tankers recorded sailing through the waterway on 1 March, according to the Joint Maritime Information Center. Total traffic through the strait is down by 94pc since the start of fighting.
The front month Nymex WTI contract was up by more than $10/bl, or 15pc, in the first two sessions since the conflict began over the weekend.
The effect on natural gas prices is even more pronounced, especially in Europe, because Qatar halted production at its 77mn t/yr Ras Laffan LNG export terminal.
Trump is scheduled to meet with treasury secretary Scott Bessent and energy secretary Chris Wright at 2pm ET Tuesday to discuss measures mitigating the impact of higher oil and LNG prices.
The administration is not considering a drawdown of strategic oil stocks at this time, according to a source familiar with the planned measures.
Advocacy group FDD senior adviser and former Trump White House staff member Rich Goldberg attributed higher oil prices to maritime insurance providers, posting on social media that "the Strait of Hormuz is open" and that "London is working against us".
Goldberg suggested there could be ways to address the spike in insurance prices. "We have a lot of creative tools to address the insurance issue in the Strait of Hormuz," he wrote on social media.
Major protection and indemnity (P&I) clubs' re-insurers will cancel war risk coverage in certain areas of the Mideast Gulf and the Gulf of Oman, according to notices issued to their members on 1 March.
These clubs include the London P&I, UK-based Steamship Mutual Underwriting Association, American P&I, Norway-based Gard and the Swedish Club. This comes after Oslo-based marine insurance provider Skuld and UK-based NorthStandard P&I cancelled war risk coverage for areas in the Mideast Gulf and the Gulf of Oman.
