Treasury Secretary Faces Off with NBC’s Kristen Welker on Oil and Sanctions
On Sunday, Treasury Secretary Scott Bessent engaged in a heated exchange with NBC’s Kristen Welker regarding the effects of monetary policy, especially in the context of rising oil prices since the onset of the conflict with Iran.
Welker challenged Bessent about the Treasury Department’s decision to lift sanctions on Iranian crude oil stored in tankers, suggesting that this move could result in Iran accruing over $14 billion in oil revenue. Bessent, however, pushed back, questioning, “Kristen, why aren’t there any good facts here?”
He elaborated, noting that Iranian oil was destined for China and would likely be sold at a discount. “So, Kristen, what’s better? If prices surge to $150, and Iran takes 70%, or if they stay below $100? I think it’s better the way it is. We’ve always anticipated this scenario,” he explained, mentioning the significant volume of oil currently at sea.
Welker pressed him further, asking how much the lifting of these sanctions would impact oil prices.
Bessent responded, dismissing her questioning as problematic, emphasizing that around 20 million barrels are extracted from the Gulf daily, with Saudi Arabia recycling about 5 million of those. He indicated that Iranian oil contributes minimally, creating a shortfall of around 10 to 14 million barrels daily if disruptions persist. “That’s roughly a two-week supply,” he added.
Continuing, Bessent made a case for the current pricing of West Texas Intermediate crude oil, arguing that despite tensions over the Russia-Ukraine situation, adequate supply exists in the market from various sources, including a notable historic oil release by a 32-nation coalition.
Later, in defense against an accusation from Welker that the Trump administration was “rewarding” Russia by easing sanctions, Bessent clarified that this perspective was misguided. He posed a rhetorical question: “Would it be better if oil hit $150 and they retain a large percentage, or if it remains below $100, limiting their revenue?” He mentioned that the potential extra revenue for Russia amounted to about $2 billion, a sum equivalent to just one day of their federal budget.
Bessent criticized those claiming that easing sanctions would result in Russia receiving significant funds, adding that China was already acquiring over 90% of Russian oil regardless of sanctions.
In a notable development, President Trump issued a stark warning to Iran, stating that the U.S. would attack the nation’s power plants if the Strait of Hormuz was not reopened within 48 hours. “If Iran does not fully open the Strait of Hormuz without threat within 48 hours from this point, the United States will attack and destroy various power plants, starting with the largest!” he stated on Truth Social.
This strait plays a crucial role in global oil and gas transportation, representing about one-fifth of the world’s crude oil supply, and has seen significant restrictions since the conflict with Iran began.
