US Treasury Secretary Predicts Oil Prices to Plunge to $40 Amid Iran Conflict

US Treasury Secretary Scott Bessent expects crude oil prices to plummet once the Iran conflict subsides. Speaking in an interview, he predicted that oil could fall as low as $40 a barrel due to oversupply after the war ends.

Brent crude currently trades above $95 a barrel, while West Texas Intermediate is at about $91, with both reaching their highest levels since July following recent military strikes between the US and Iran. The surge in energy prices has fueled concerns over inflation and driven up yields on benchmark bonds worldwide, including ten-year US rates, which hit their highest since 2023.

Bessent emphasized that the correlation between oil prices and interest rates is at an all-time high. He attributed the spike in headline inflation to the Iran conflict and claimed that once it resolves, both interest rates and inflation will decrease.