U.S. Treasury Secretary Scott Bessent said Sunday that he expects energy prices to ease later in the year, even as they have recently risen in response to the U.S.-Israel conflict with Iran. Speaking on Fox Business Network's "Sunday Morning Futures," Bessent said he anticipated a reversal in prices once the situation resolves.
Bessent was explicit about his outlook for crude: "Oil prices on the other side of this conflict are going to be much lower," he said during the program.
The Treasury secretary's comments come amidst a period of elevated energy costs. Data from the American Automobile Association show the average U.S. gasoline price climbed to its highest level in nearly four years on Tuesday, a move tied to hostilities following U.S. and Israeli attacks on Iran in late February.
According to AAA, average pump prices rose 7 cents to $4.18 per gallon on Tuesday, the largest single-day increase recorded in more than a month. The data also indicate that gasoline prices have jumped $1.19 per gallon - an increase of more than 40% - since late February.
Energy costs have surged in part because the conflict has disrupted shipping through the Strait of Hormuz, a chokepoint that handles about one-fifth of global oil and gas supplies. Restrictions on vessel movements in that waterway have contributed to tighter supply dynamics and higher market prices.
On the production side, U.S. energy companies added oil and natural gas rigs for a second consecutive week, marking the first back-to-back gain since mid-March, Baker Hughes reported in data released Friday. The increase in drilling activity comes amid the price volatility tied to geopolitical developments.
Bessent's forecast frames the recent price jump as a temporary response to geopolitical events, with an expectation that prices will decline once the acute phase of the conflict ends. The data from AAA and Baker Hughes together illustrate both the immediate consumer impact at the pump and the industry's response in drilling activity during the period of disruption.