Besent: Oil Prices May Drop to $40 After Iran Conflict Ends, U.S. Treasury Yields to Decline

Golden Finance reported on September 5 that U.S. Treasury Secretary Besent stated that oil prices could significantly fall to $40 per barrel after the Iran conflict ends, as increased crude oil supply would drive U.S. Treasury yields lower. Besent noted that the conclusion of the Iran conflict could lead to an oversupply in the oil market, "possibly seeing crude oil prices at $50 or $40," due to a substantial influx of supply into the market. Amid recent U.S.-Iran military tensions, Brent crude oil briefly surged above $95 per barrel on Friday, while WTI crude approached $90 per barrel. Besent remarked that the recent rise in energy prices has heightened market concerns about inflation and pushed global benchmark bond yields higher, with the U.S. 10-year Treasury yield reaching its highest level in 2023 this week. Besent also downplayed the impact of Norway's sovereign wealth fund reducing its holdings of U.S. Treasury bonds, stating that the fund merely aims to allocate assets to other U.S. investments, including bonds related to Fannie Mae and Freddie Mac.