Oil Executives Warn of Prolonged Supply Shock and Recession Risk as Bessent Calls Price Rise Temporary

Treasury Secretary Scott Bessent said recent energy-driven inflation and elevated crude prices are temporary distortions that will soon reverse. He spoke during a White House briefing reported by the New York Post. Bessent stated that oil flows through the region will normalize once the conflict ends.

He publicly predicted that oil will be lower than pre-conflict levels when this ends. S. is more resilient to energy price fluctuations due to President Trump's energy dominance and deregulatory agenda.

"I firmly believe that nothing is more transient than a supply shock," Bessent told CNBC. He argued that a lower personal savings rate can mean people have more confidence rather than financial stress. Average 401(k) balances have risen by roughly $30,000 since President Donald Trump returned to office, Bessent said.

6% over the past four quarters. 8%. Chevron CEO Mike Wirth spoke at a Bernstein conference.

He said crude inventories are steadily shrinking and the market's traditional shock absorbers are disappearing. "The buffers and the shock absorbers are being steadily drawn down, and the ability for the market to absorb this imbalance is drastically diminished today versus where we started," Wirth said, according to the Financial Times.

Wirth said over the next few weeks pressures will flow through more directly to physical prices with more upwards pressure expected into June and July.

He warned that if elevated physical pressures push crude prices too high over June and July, the energy crisis risks tipping the global economy into recession. The ongoing disruption around the Strait of Hormuz has removed an estimated 12 million to 13 million barrels of oil per day from global markets, Wirth said.

ADNOC chief executive Sultan al-Jaber spoke at an Atlantic Council event on May 21.

He said restoring Middle Eastern energy infrastructure is unlikely to happen quickly even if the conflict is resolved. "It will take at least four months to get back to 80 percent of pre-conflict flows, and full flows will not return before the first or even second quarter of 2027," al-Jaber said.