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Oil Prices Likely to Climb in Coming Weeks, U.S. Energy Secretary Says
(MENAFN) US Energy Secretary Chris Wright cautioned Monday that oil prices are likely to climb further before any relief arrives, as the ongoing blockade of the Strait of Hormuz continues to squeeze global energy markets.
"We're going to see energy prices high – and maybe even rising – until we get meaningful ship traffic through the Strait of Hormuz," Wright told attendees at the Semafor World Economy conference in Washington, DC.
The secretary projected a near-term ceiling on the current price surge, stating: "That'll probably hit the peak oil price at that time. That's probably sometime in the next few weeks."
He offered a cautious outlook on any post-conflict recovery, warning markets against expecting a swift turnaround.
"Once the conflict (between the US and Iran) ends and energy starts flowing again, you'll start to see downward pressure. But it will take some time," he added.
Wright also acknowledged that the White House entered the conflict fully aware of the economic consequences for consumers.
"The president knew going into this that if you disrupt the flow of energy in the short term, you're going to push up energy prices," Wright said.
On the prospect of a summer price recovery, the secretary was equally measured: "By the summer is an aggressive timeframe," he said, signaling that even a resumption of energy flows would not translate into immediate relief at the pump.
Oil markets have been on an upward trajectory since the US-Israeli military campaign against Iran commenced on Feb. 28, with Tehran effectively shutting the Strait of Hormuz to most foreign commercial traffic.
Diplomatic efforts to end the war collapsed over the weekend during talks in Islamabad, Pakistan, despite a Pakistani-brokered two-week ceasefire, prompting Washington to impose a naval blockade on Iranian ports.
US Central Command (CENTCOM) confirmed the blockade would be applied without exception to all vessels entering or departing Iranian ports across the Arabian Gulf and the Gulf of Oman.
"We're going to see energy prices high – and maybe even rising – until we get meaningful ship traffic through the Strait of Hormuz," Wright told attendees at the Semafor World Economy conference in Washington, DC.
The secretary projected a near-term ceiling on the current price surge, stating: "That'll probably hit the peak oil price at that time. That's probably sometime in the next few weeks."
He offered a cautious outlook on any post-conflict recovery, warning markets against expecting a swift turnaround.
"Once the conflict (between the US and Iran) ends and energy starts flowing again, you'll start to see downward pressure. But it will take some time," he added.
Wright also acknowledged that the White House entered the conflict fully aware of the economic consequences for consumers.
"The president knew going into this that if you disrupt the flow of energy in the short term, you're going to push up energy prices," Wright said.
On the prospect of a summer price recovery, the secretary was equally measured: "By the summer is an aggressive timeframe," he said, signaling that even a resumption of energy flows would not translate into immediate relief at the pump.
Oil markets have been on an upward trajectory since the US-Israeli military campaign against Iran commenced on Feb. 28, with Tehran effectively shutting the Strait of Hormuz to most foreign commercial traffic.
Diplomatic efforts to end the war collapsed over the weekend during talks in Islamabad, Pakistan, despite a Pakistani-brokered two-week ceasefire, prompting Washington to impose a naval blockade on Iranian ports.
US Central Command (CENTCOM) confirmed the blockade would be applied without exception to all vessels entering or departing Iranian ports across the Arabian Gulf and the Gulf of Oman.
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