US Treasury Secretary Scott Bessent expects oil prices to fall to between $40 and $50 a barrel once the military conflict with Iran ends, as markets stabilize and global supplies increase.
In a televised interview aired Friday, Bessent said the easing of tensions would lead to additional crude supplies entering the market, potentially creating a significant surplus that would put downward pressure on prices.
He added that lower energy prices would ease inflationary pressures and lead to a decline in US Treasury yields, which have recently risen amid concerns that higher oil prices could increase borrowing costs.
Bessent’s forecast comes as crude prices continue to rise due to risks surrounding energy supplies and shipping through the Strait of Hormuz. Brent crude was trading near $95.62 a barrel after reaching $97.60 during the week, while West Texas Intermediate was trading near $91.22 a barrel.
In financial markets, the yield on the 10-year US Treasury note rose to between 4.79% and 4.82%, while spot gold fell 1.1% to $4,419.09 an ounce, pressured by higher yields and a stronger dollar.
Bessent’s forecast is tied to an expected decline in the geopolitical risk premium in the oil market. However, whether prices reach those levels will depend on the course of the conflict and the restoration of normal supply flows and shipping activity.
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