Oil Prices May Fall Despite Hormuz Crisis, Says US Treasury Secretary

(MENAFN- IANS) Washington, May 29 (IANS) US Treasury Secretary Scott Bessent expressed confidence that global oil prices could decline rapidly once shipping disruptions in the Gulf ease, arguing that energy markets remain well supplied despite tensions surrounding the Strait of Hormuz.

Speaking at a White House briefing, Bessent said the market had already shown resilience and suggested that fears of a prolonged energy shock may be overstated.

"There are almost 2,000 ships waiting to come out of the Gulf and I think the oil market is going to be very well supplied on the other side of this, and that we could see prices come down very quickly," Bessent told reporters.

The comments come as governments and energy markets closely monitor developments around the Strait of Hormuz, one of the world's most important maritime chokepoints through which a significant portion of global oil supplies passes every day.

Bessent said oil prices had already softened in recent weeks despite the geopolitical uncertainty.

"What we've seen is actually oil prices are down about 10 per cent in May," he said, adding that additional supplies from major producers could help stabilise markets once normal shipping resumes.

Referring to recent discussions with energy-producing nations, Bessent said he expected the market to remain adequately supplied after the current disruption passes.

"I would expect on the other side of this that gasoline prices will follow," he said when asked about the outlook for fuel costs.

The Treasury Secretary also highlighted the United States' growing energy production, arguing that it has made the American economy more resilient to external shocks.

"We are more resilient to energy price fluctuations due to President Trump's energy dominance and deregulatory agenda," Bessent said.

"The United States is now the world's largest energy exporter. The United States has never exported so much energy or produced so much energy."

Bessent linked the administration's broader economic outlook to energy stability, noting that economic growth has remained strong despite concerns about inflation and global uncertainty.

He said the administration expected inflationary pressures to moderate if energy markets continue to stabilise.

Asked whether the closure of the Strait of Hormuz could create longer-term supply problems, Bessent suggested that the current disruption may eventually lead to a surge of shipments once transit resumes.

"As the strait opens up, we're going to see this burst of ships come out," he said. "We may actually see how quickly can it be refined, how quickly can it get to its destination."

Bessent repeatedly stressed the importance of maintaining free navigation through the waterway, describing it as one of the key conditions sought by the Trump administration in its ongoing discussions with Iran.

"The Strait of Hormuz has to free transit. Navigation of the seas has to be free and open as it was before," he said.

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