Oil prices avoid worst-case $200-a-barrel scenario

Wright cites US strategic reserve releases, China's reduced energy imports

Energy prices may take months to normalize, secretary warns

US Energy Secretary Chris Wright attends the first National AI Challenge Champions Award ceremony hosted by first lady Melania Trump at the White House East Room on Tuesday. [Reuters]
US Energy Secretary Chris Wright attends the first National AI Challenge Champions Award ceremony hosted by first lady Melania Trump at the White House East Room on Tuesday. [Reuters]

US Energy Secretary Chris Wright said Tuesday that the number of vessels transiting the Strait of Hormuz has been increasing "very significantly." His upbeat assessment of shipping traffic through the waterway, alongside US efforts to contain the Israel-Iran conflict, pushed international oil prices lower.

Wright made the remarks at the 2026 Global Energy Forum, hosted by the Atlantic Council think tank in Washington, in response to a question about how Hormuz traffic compared with one to two weeks earlier. He also said "multiple factors are working together" to explain why global oil prices have not surpassed $200 per barrel despite the energy supply shock from the war with Iran.

He identified two main drivers of price stability: the release of strategic petroleum reserves by the United States and some 30 other countries, and a sharp pullback in crude imports by China — the world's largest oil buyer — to around 4 million barrels per day. On China, Wright said the country "has stopped accumulating strategic reserves," adding that it "is releasing some of its stockpiles, has cut refinery utilization to reduce product output, and is curbing economic activity. But this is not a permanent change."

On the prospect of energy prices returning to pre-war levels, Wright said "it will take some time," warning that "ships are being rerouted and some supply chains have been disrupted or rerouted, so it will probably take several months for energy flows to return to normal."

Wright had offered a similar outlook in April, projecting that energy prices would take several months after the end of the war to normalize — only to be contradicted the following day by President Donald Trump, who said in a phone interview with The Hill, "I think he's wrong. Gas prices will normalize the moment the war ends." Wright had since avoided commenting on the energy price outlook, but with the conflict dragging on past a truce without reaching a final peace settlement, he revisited the forecast Tuesday.

Wright described the blow from the Hormuz blockade as something the world "did not absorb without any impact, but experienced far less severely than expected," adding that "if you think about the other side of this situation, the energy prices we have paid are well worth it." He said the worst-case scenario had been avoided. He then urged listeners to "imagine what kind of world we move into beyond this situation, if Iran is no longer a persistent threat to its neighbors, to peace and stability, and to investment and energy flows in the region" — reiterating the US position on the war and the ongoing negotiations.


kate01@heraldcorp.com