US Treasury Secretary Scott Bessent has said crude oil prices could fall to $40 a barrel if the military conflict with Iran ends, arguing that increased supply would ease inflationary pressure and potentially push US government bond yields lower.
Bessent made the comments in an interview with Bloomberg TV on Friday. He said a resolution to the conflict could lead to substantially greater oil supply in the market, bringing crude prices down to around $50 or even $40 per barrel.
The secretary did not give a timeline for when the conflict might end. He also acknowledged that there were no clear signs of an immediate conclusion to the fighting, leaving the timing of any potential fall in oil prices uncertain.
The comments came as crude prices remained elevated. Brent crude was trading above $95 a barrel on Friday, close to its highest level since July, while West Texas Intermediate was around $91 a barrel, according to the report.
Oil prices have risen in recent weeks following military attacks involving the United States and Iran. The increase has intensified concerns about inflation because higher energy costs can feed into consumer prices, transport expenses and the cost of operating businesses and infrastructure.
Bessent linked the movement in oil prices to inflation and borrowing costs. He said that if the conflict ended, lower energy prices could reduce inflationary pressure. Rising inflation expectations have contributed to higher government bond yields, with the US 10-year Treasury yield reaching its highest level since 2023 during the week.
For cities and urban economies, sustained changes in crude prices can affect fuel costs, public and private transport, logistics, construction activity and household budgets. However, the extent and speed of any impact would depend on the duration of the conflict, the return of supply to global markets and how energy prices are passed through to consumers.
Bessent’s comments represent a forecast rather than a confirmed market outlook. The report did not specify when the Iran conflict might end, and oil prices remained high at the time of the interview. Further movement will depend on developments in the conflict and their effect on global oil supply.
