Besant Predicts Oil Prices to Drop to $40 After Iran Conflict Ends

Scott Besant, the U.S. Treasury Secretary, has predicted that international oil prices could fall to $40 per barrel once the military conflict between the U.S. and Iran comes to an end. He argued that the oil market would enter a state of oversupply after the war concludes, leading to a decline in bond yields as well. In an interview with Steve Bannon on the 4th, Secretary Besant stated, "I expect oil prices to drop once we reach the other side of the Iran conflict." He mentioned that supply is expected to increase significantly, suggesting that "oil prices could go down to $50, or perhaps even $40." Currently, Brent crude is trading above $95 per barrel, while West Texas Intermediate (WTI) is around $91. Secretary Besant noted, "Looking at interest rates, there has never been such a strong correlation with oil prices as we see now," explaining that oil prices could plummet and bond yields could also decrease once the Iran conflict ends. Additionally, he expressed reduced concerns regarding the Norwegian Sovereign Wealth Fund's plans to decrease its holdings in U.S. Treasury bonds. If the proposed measures are implemented, the Norwegian Sovereign Wealth Fund's holdings in U.S. Treasuries could decrease by $75 billion. Secretary Besant explained that the Norwegian Sovereign Wealth Fund is looking to shift towards assets with higher yields rather than moving away from U.S. assets.

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