Uche Cecil Izuora
The United States of America (USA) has assured global economies that the current hike in crude oil price is temporary.
The U.S. Energy Secretary Chris Wright, countered market warnings about an extended Middle East war, saying global energy supplies are sufficient and the surge in oil prices reflects a “fear premium” that won’t last.
Wright joined President Donald Trump in arguing that the U.S.-Israeli war with Iran will only temporarily disrupt markets and ship traffic, saying the timeline “in the worst case” is a matter of weeks, rather than months.
“The oil is there,” Wright said Sunday on CNN’s State of the Union. “You’re seeing a little bit of fear premium in the marketplace. But the world is not short of oil today or natural gas.”
With midterm elections ahead in November, Trump is courting political risk with the attack on Iran which has prompted Iranian retaliation on U.S. allies in the Persian Gulf virtually halted tanker traffic through the Hormuz strait and pushed up gasoline prices for Americans.
“What you are seeing is emotional reactions and fear that this is a long-term war,” Wright said on CBS’s Face the Nation. “This is not a long-term war. This is a temporary movement.”
While Wright cited a tanker that “went through the Gulf about 24 hours ago,” Hormuz transit remained near a standstill for a sixth day with only Iran- linked tankers making the crossing over the past 24 hours.
The Trump administration has announced a $20 billion reinsurance program and suggested Navy escorts in a bid to revive traffic, though Wright suggested the U.S. is focused on airstrikes on Iran for now.
“We’re nowhere near normal traffic right now,” he said on CNN. “And you know in that that’ll take some time. But again, worst case, that’s a few weeks, that’s not months.”
Wright acknowledged the impact on U.S. retail fuel prices, which have increased by almost 16% in a week to $3.45 for regular gasoline, according to the American Automobile Association’s national average.
“We want it back below $3 a gallon, and it will be again before too long,” Wright said.
Wright echoed Trump in citing U.S. reports of progress in destroying most of Iran’s missile and drone capability, though he said only Israel is attacking Iranian oil or gas infrastructure.
“There are no plans to target Iran’s oil industry, their natural gas industry, or anything about their energy industry,” he said. “And these are Israeli strikes. These are local fuel depots to fill up the gas tank, you know, in this neighborhood in Tehran.
White House Press Secretary Karoline Leavitt argued that markets are facing “a short-term disruption.”
“We’re seeing a slight increase in oil and gas prices, but ultimately, taking out the rogue Iranian regime is going to be a good thing for the oil industry,” Leavitt said on Fox News’ Sunday Morning Futures.