Treasury Secretary Scott Bessent has projected a significant decrease in oil prices in the aftermath of the Iran conflict resolution.
Bessent, in an interview on Fox News’ “My View with Lara Trump” on Sunday, suggested that the end of the Iran conflict would result in a surge of supply in the oil market, leading to a steep drop in prices. He asserted that the U.S. economy is “very strong” and undergoing a “productivity burst”.
The Secretary further stated, “On the other side of this, we actually could see oil prices at $40 or $50 because there’s so much supply coming on. It’s just constricted right now.”
He also predicted that the importance of the Strait of Hormuz to global oil trade would diminish as Gulf nations build alternative pipeline routes, thereby reducing Iran’s ability to disrupt oil flows. Previously, he had referred to the strait as an energy choke point, particularly for many countries, though not for the U.S.
Bessent referred to the current “energy supply shock” as a temporary phase, and labeled the U.S. as an “energy superpower”. He highlighted the resilience of the U.S. economy, citing solid job and wage growth, and said he expects real wages to rise further as the war comes to an end.
“I think we are going to get to the other side of this Iran conflict with a safer world, with an Iran that cannot have a nuclear weapon, and that we are in the lift-off phase,” he said.
Schiff Mocks Bessent Over Iran Outlook
Economist Peter Schiff took a jibe at Bessent’s comments and wrote on X, “Don’t believe anything this guy says. I don’t think he believes what he is saying either.”
Earlier this year, BlackRock Inc. (NYSE:BLK) CEO Larry Fink‘s prediction aligned with that of Bessent. Fink said oil prices could fall below $50 a barrel if the Iran war ends with the country "neutralized" and its oil supply returns to global markets. He argued that such an outcome could create a significant supply boost and push prices sharply lower.
However, he also warned of the opposite scenario: if the conflict continues and Iran remains a threat to global energy supplies, oil could stay elevated for years and potentially reach $150 a barrel, with severe consequences for the global economy.
At the time of writing, Brent crude oil futures expiring in October were trading 0.78% higher at $97.03 per barrel, while WTI crude futures expiring in October were trading 0.39% higher at $91.87 per barrel.
Price Action: On Friday, United States Brent Oil Fund (NYSE:BNO)and ProShares Ultra Bloomberg Crude Oil (NYSE:UCO) climbed 0.38% and 1.24%, respectively. Meanwhile, United States Oil Fund (NYSE:USO) fell 0.091%, as per Benzinga Pro.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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