Archive · 5 Sep 2026
Bessent Predicts $40 Oil After Iran Conflict, Bond Yields Fall
Scott Bessent thinks oil could become much cheaper after the Iran conflict ends.
He said prices might fall to $50 or even $40 per barrel.
He expects more oil production to become available than people need.
Right now, oil costs more than $90 per barrel because fighting involving the United States and Iran has raised supply concerns.
Expensive oil can make other goods and services cost more.
This has made people worry about inflation.
Those worries have also pushed up interest rates on government bonds.
Bessent said cheaper oil could help bring inflation and bond yields down.
However, no one knows when the conflict will end.
He also said Norway may move some Treasury investments into other US-backed assets.
Treasury Secretary Scott Bessent said crude could fall to $50 or $40 a barrel after the Iran conflict ends.
He expects increased production to create a global oil-market surplus.
Brent crude traded above $95 a barrel, while West Texas Intermediate was around $91.
Higher oil prices have intensified inflation concerns and pushed 10-year US Treasury yields to their highest level since 2023.
Bessent said Norway’s proposed $75 billion Treasury reduction could shift into higher-yielding US-backed securities.
- Who
- Treasury Secretary Scott Bessent, Norway’s sovereign wealth fund, investors, and US-backed financial institutions.
- What
- Bessent forecast that crude oil could fall as low as $40 a barrel after the Iran conflict and discussed Norway’s possible reduction of US Treasury holdings.
- When
- Bessent’s interview aired Friday; oil and bond-market pressures intensified during the week.
- Where
- The developments concern global oil markets and US and international bond markets, including shipping routes through the Strait of Hormuz.
- Why
- Bessent expects new production to create an oil surplus, while current energy prices are increasing inflation concerns and bond yields.
Bessent’s Outlook
Market Uncertainty
Future oil prices
Bessent’s Outlook
Bessent expects oil prices to fall sharply after the conflict because increased production could leave the market oversupplied.
Market Uncertainty
Oil prices remain elevated, with Brent above $95 and West Texas Intermediate around $91, while continuing military tensions raise concerns about supply disruptions.
Inflation and bond yields
Bessent’s Outlook
Bessent expects lower energy prices to reduce inflation pressures and bring interest rates and bond yields down.
Market Uncertainty
Higher oil prices have contributed to inflation concerns and pushed the 10-year US Treasury yield to its highest level since 2023; the timing of any reversal is uncertain.
Norway’s Treasury holdings
Bessent’s Outlook
Bessent said Norway’s proposed reduction may reflect a search for higher returns through other US-backed securities rather than reduced confidence in US government debt.
Market Uncertainty
The proposed reduction could increase concerns about investor demand for Treasuries while US borrowing remains substantial.
- Oil forecast
- Bessent said crude could fall to the $50-to-$40 range after the Iran conflict ends.
- Current oil prices
- Brent crude traded above $95 a barrel, while West Texas Intermediate traded around $91.
- Weekly oil gain
- Crude prices rose more than 9% during the week, according to Trading Economics.
- US Treasury yields
- The 10-year US Treasury yield reached its highest level since 2023.
- Norwegian fund proposal
- The proposed change could reduce Norway’s US Treasury holdings by about $75 billion, according to estimates cited in the reports.
- Potential alternative investments
- Bessent said Norway could seek higher-yielding US-backed securities linked to Fannie Mae, Freddie Mac, and Ginnie Mae.
- Federal debt
- One measure of US federal debt recently passed $40 trillion.
