During a recent segment on CNBC’s “Squawk Box,” Treasury Secretary Scott Bessent challenged a reporter’s depiction of the global oil shortage, contending that the media has somewhat exaggerated the extent of the supply gap stemming from disruptions in the Persian Gulf. He engaged in a discussion with CNBC’s Brian Sullivan, disagreeing with the view that the release of Russian oil shipments is a negligible factor in the overall global supply.
“No, no, that’s a misleading way to look at it,” Bessent responded after Sullivan suggested that the oil in question amounts to about a day and a half of global supply. “Putting it this way, we’re talking about a loss of around 20 million barrels per day from the Gulf.” This conversation comes amid growing tensions surrounding Iran and various disturbances near the Strait of Hormuz, a crucial shipping lane for oil and natural gas.
Bessent emphasized that the market dynamics suggest there is more oil available than some analysts might assume. He particularly pointed out that approximately 1.5 million barrels per day of oil exported from the Gulf originates from Iranian sources. Countries like Saudi Arabia and the UAE are also shifting their shipments to alternative routes to mitigate the crisis.
“We’re facing a shortfall, maybe between 10 and 14 million barrels,” he stated, referencing current estimates of global supply deficits. Despite this shortfall, Bessent indicated that there are safeguards in place, such as Iranian crude still being stored on tankers and reserves held by major oil-producing nations.
“Think about Russian oil—if the market remains stagnant, we might have a supply for only about nine to 12 days,” he noted. As for the anticipated meeting between President Donald Trump and Chinese President Xi Jinping, Bessent explained that any potential postponement would be due to logistical challenges, not the ongoing security issues in the Strait of Hormuz.
If that meeting needs to be rescheduled, it would be purely for logistical reasons, Bessent indicated. He highlighted the productive nature of discussions with the Chinese trade delegation and suggested that global oil prices could eventually decline as subsidies and market conditions stabilize.
When asked if oil prices might settle around $80 a barrel in the near future, Bessent remarked, “I think they might actually go a bit lower.”
