US Energy Secretary Chris Wright said on Thursday that oil prices are unlikely to reach $200 a barrel, even as crude tankers remained stalled in the Strait of Hormuz and two vessels blazed at an Iraqi port following suspected Iranian drone boat attacks.
“I would say unlikely, but we are focused on the military operation and solving a problem,” Wright told CNN when asked about the $200 threshold — a level an Iranian official had warned was possible if the war continues to escalate.
Ebrahim Zolfaqari, spokesperson for Tehran’s Khatam al-Anbiya military command headquarters, said on Wednesday that oil prices depended on regional security that the US and Israel had “destabilised.”
Oil prices jumped 6% to nearly $100 a barrel on Thursday following the Iraqi port attacks. The rise came despite more than 30 countries in the International Energy Agency announcing the largest-ever coordinated drawdown of global oil reserves — 400 million barrels — roughly 40% of which will come from the United States.
The IEA said on Thursday that the war had forced Middle East Gulf countries to cut total oil production by at least 10 million barrels per day, around 10% of global demand, marking the biggest oil supply disruption in the history of the global market.
Wright also told CNBC that the US Navy could not currently escort ships through the Strait of Hormuz but that it was “quite likely” such escorts could begin by the end of the month.
(Reuters)
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