Bessent: Oil Market to Stay Well-Supplied Despite Strait of Hormuz Tensions

Treasury Secretary Scott Bessent expressed confidence that global oil markets would remain robust despite ongoing geopolitical tensions in the Strait of Hormuz, while addressing questions on inflation trends, energy prices, and diplomatic negotiations with Iran.

Responding to concerns about supply disruptions influencing economic data, Bessent noted that the Personal Consumption Expenditures (PCE) index rose 0.2% month-over-month—below the 0.3% consensus estimate. “One month doesn’t a trend make,” he said, urging caution against overinterpreting short-term data fluctuations.

Bessent highlighted that oil prices had declined approximately 10% in May and pointed to nearly 2,000 vessels currently waiting to exit the Gulf region as evidence of latent supply capacity. “I think the oil market will be very well-supplied on the other side of this,” he stated, adding that prices could fall rapidly once logistical constraints ease. He cited the United Arab Emirates’ (UAE) recent departure from OPEC as a factor enhancing market flexibility and projected that gasoline prices would follow crude oil lower.

On diplomatic developments, Bessent confirmed that negotiating teams have been engaged in ongoing discussions regarding a potential 60-day ceasefire proposal. While not confirming a finalized agreement with Iran, he outlined the non-negotiable conditions President Donald Trump has established. According to Bessent, these red lines include Iran surrendering its stockpile of highly enriched uranium, halting any pursuit of nuclear weapons capability, and guaranteeing free and open navigation through the Strait of Hormuz.

“The Strait of Hormuz… has to be free and open,” Bessent emphasized, underscoring the administration’s commitment to unimpeded maritime commerce. He noted that President Trump had clearly communicated these priorities during a recent cabinet meeting.

Bessent also referenced a broader economic vision, stating an aspiration to “create a generation of shareholders,” though he did not elaborate on specific policy mechanisms to advance that goal.

The Treasury Secretary’s remarks come amid heightened scrutiny of energy markets and inflation trends, as policymakers weigh geopolitical risks against domestic economic indicators.