US Energy Secretary: "Oil Price Increase Not Significant" vs Industry: "Supply Is Tight"

Energy Secretary: "Low Probability of Oil Reaching $175 per Barrel"
Industry: "Other Supply Chains Will Be Affected"

The administration of U.S. President Donald Trump has sought to calm the markets by downplaying concerns over crude oil supply. However, the energy industry has pushed back, emphasizing the ripple effects of soaring oil prices, which they warn are negatively impacting global economic growth.

According to Bloomberg and The Wall Street Journal on the 23rd (local time), Chris Wright, U.S. Secretary of Energy, stated at the CERAWeek energy conference in Houston, “The rise in oil prices is not large enough to trigger a meaningful decline in demand.” He added, “The market plays its role,” and explained, “Price increases are meant to signal everyone who can expand production to do so.”

Chris Wright, U.S. Secretary of Energy. Photo by AFP Yonhap News

Secretary Wright explained that, in response to supply disruptions caused by the Iran war, the United States plans to release about 1 to 1.5 million barrels per day from the Strategic Petroleum Reserve (SPR), with total daily releases potentially reaching as much as 3 million barrels. Following the outbreak of the Iran war, Washington decided to release 172 million barrels of SPR over a period of four months to counter the surge in international oil prices.

In an interview with U.S. financial media outlet CNBC on the same day, Wright also announced plans to supply additional diesel fuel to address the spike in energy prices. However, he clarified, “We do not want to impede the free flow of energy trade,” and stated that the U.S. is not considering restrictions on diesel exports. When asked about some airline CEOs’ predictions that oil prices could soar to $175 per barrel, he dismissed the scenario, saying, “We certainly do not expect that to happen. The probability is extremely low, and that’s just how companies manage risk.”

In contrast, the energy industry is taking the issue of rising oil prices very seriously. At CERAWeek, Mike Wirth, CEO of Chevron, warned that crude oil prices do not fully reflect the impact of the Strait of Hormuz blockade, stating, “The oil market supply is tighter than investors perceive.” He added, “It will take time to get out of this situation.” Patrick Pouyanne, CEO of TotalEnergies, cited disruptions in helium transportation from the Middle East as an example and warned that “the consequences of the Iran war will not be limited to higher energy prices. Other supply chains will be affected as well.”

Sultan Al Jaber, CEO of Abu Dhabi National Oil Company (ADNOC), said that the surge in oil prices is “raising living costs for those least able to bear it and slowing global economic growth.” He pointed out, “From factories to farms to households around the world, the damage is growing every day.” Regarding the blockade of the Strait of Hormuz, he emphasized, “This is economic terrorism against all nations, and no country should hold the Strait of Hormuz hostage.”

This content was produced with the assistance of AI translation services.