Bessent: Oil prices will be lower than pre-conflict levels

Treasury Secretary Scott Bessent said oil prices will fall below pre-conflict levels as supply conditions improve, citing a large backlog of tankers waiting to exit the Gulf region.

Speaking on the outlook for energy markets, Bessent noted that 2,000 ships are waiting to leave the Gulf, and the oil market is set to be very well supplied. He also stated that President Trump has drawn red lines requiring the Strait of Hormuz to remain free and open, and that Oman has indicated it will not toll the strait, reducing the need for military action. The comments come amid ongoing tensions with Iran, with Bessent emphasizing that US patience is not forever but that actions so far have been defensive.

For traders monitoring interest rates and central bank policy, lower oil prices are a key input for inflation expectations. A sustained decline in energy costs could ease pressure on central banks like the Federal Reserve, potentially reducing the urgency for further rate hikes or allowing for earlier rate cuts. NowPrice's live rates and charts show how energy-driven shifts in inflation expectations are already being priced into bond markets. Traders should watch for upcoming inventory data and any further diplomatic developments regarding the Strait of Hormuz, as these could amplify or reverse the current supply-driven price outlook.