Former Energy Secretary Dan Brouillette joins ‘Mornings with Maria’ to break down rising oil prices, escalating tensions in Iran and what it means for American energy security.
As fears grow that a possible U.S. attack on Iran could choke global oil supplies and send prices soaring, says former Energy Secretary Dan Brouillette. strong American production keeps a price shock of $100 per barrel under control for the time being.
“What we don’t see is a lack of supply in the market. That is traditionally what would drive prices up. That is not the case today,” Brouillette said Monday.
Instead, he said the recent jump reflects traders considering the possibility that escalating tensions — including a possible attack in Iran — could disrupt oil shipments through the Strait of Hormuz, a narrow waterway that carries about 20% of the world’s petroleum liquids.
SCOTT BESSENT SAYS IRAN UNDERSTANDS ‘BRUTE FORCE’ AS TRUMP WEIGHS OPTIONS Amid Nuclear Standoff
Oil pump jacks stand in the Inglewood oil field in Los Angeles, California on November 23, 2021. (Mario Tama/Getty Images/Getty Images)
“We’re setting records and that brings stability to the market,” he said, adding: “So instead of $100 a barrel oil today, we’re seeing prices in the mid-60s.”
His comments came as crude oil hovered around $66.59 a barrel at the time of broadcast, following a recent jump fueled by rising tensions with the Islamic Republic.
Brouillette said he expects prices to stabilize in the coming weeks as uncertainty, rather than actual shortages, continues to drive short-term volatility.
“This is really a risk price today. It’s not an offer price,” he said. “And I think we’ll see that for a while.”
THE FALL OF MADURO RISKS IRAN’S DEEP ENERGY AND DEFENSE COOPERATION WITH VENEZUELA
Oil tankers pass through the Strait of Hormuz on December 21, 2018. (Reuters/Hamad I Mohammed / Reuters)
Brouillette argued that if supply remains strong, prices should eventually stabilize instead of rising.
“I think you will see them stabilize over time,” he told Maria Bartimo. “We’re looking at the mid-60s today. I wouldn’t be surprised to see the numbers drop a little, especially if we have a situation in Iran where they return to what might be termed polite society.”
A shift in Iran’s stance — or a broader political change that brings more Iranian crude oil back to the world market — could further ease the pressure, he said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
‘The Big Money Show’ discusses the impact of a possible war between the US and Iran on oil prices.
“If this regime goes away and that oil becomes available, we’re looking at potentially another million, million and a half barrels of oil coming onto the global market,” Brouillette said.
“That will change the supply situation significantly and it could push prices a little lower.”
