Bessent Sees Oil Prices Plummeting to $40 Post-Iran War

Treasury Secretary Scott Bessent predicts oil prices will plummet to as low as $40 a barrel once the Iran conflict is over. He believes the market will be oversupplied, leading to lower bond yields that have been rising due to inflation concerns.

Brent crude was trading above $95 a barrel on Friday, its highest level since July, while West Texas Intermediate was near $91. The rise in energy prices has added to worries about inflation, driving up yields on benchmark bonds worldwide. Ten-year US rates hit their highest levels since 2023 this week.

Bessent also downplayed the significance of Norway's sovereign wealth fund proposing to reduce its holdings of Treasuries by $75 billion. He suggested that the fund is seeking to upgrade its yield with other American assets, such as Fannie Mae and Freddie Mac paper, which typically offer a premium over Treasuries.