US Treasury Sec Bessent Predicts Oil Drop Below Pre-Conflict Levels on Hormuz Reopening

Key Facts

US Treasury Secretary Scott Bessent stated that oil prices are expected to drop below pre-conflict levels once the Strait of Hormuz is fully reopened. He highlighted that approximately 2,000 ships are currently waiting to exit the Gulf, signaling a massive influx of supply to the global market. Furthermore, Oman has informed the US that it will not impose tolls on the strait, a move seen as significantly reducing the potential for military escalation in the strategic waterway.

These comments arrive as the US administration prioritizes energy price stability to combat persistent inflationary pressures. Peer analysis shows that major institutions like Goldman Sachs have recently forecasted a potential supply surplus heading into 2026 (per market data). This bearish outlook is compounded by weakening economic indicators, such as the Michigan Consumer Sentiment index which fell to 44.8 on May 22, 2026, suggesting a potential cooling in global energy demand.

Traders should closely watch current price levels following the market close on May 28, 2026, as the backlog of ships begins to clear. Key upcoming catalysts include the Fed Waller speech, which may address energy-driven inflation, and the CB Consumer Confidence data scheduled for release on May 26, 2026. These events will be critical in determining if the projected supply surge will meet a resilient or weakening global consumer base.