Scott Bessent predicts oil prices could drop by $40–$50 a barrel after Iran conflict ends

If you’ve been watching oil prices swing between $97 and triple digits this year, Scott Bessent has a message: enjoy the volatility while it lasts, because the other side of this conflict looks very different.

The US Treasury Secretary predicted on September 4 that oil prices could fall by $40 to $50 per barrel once the US-Iran conflict reaches a resolution. That math, applied to current Brent crude levels near $97, would put a barrel of oil somewhere in the $47 to $57 range. In other words, roughly half what markets have been pricing during the worst of the tensions.

Why Bessent sees a surplus coming

New oil production has been coming online globally, and the primary thing keeping prices elevated is the disruption around the Strait of Hormuz, the narrow chokepoint through which a significant share of the world’s seaborne oil passes. Once that disruption lifts, Bessent’s argument goes, supply that has been bottled up floods back into the market simultaneously with the new production that has been building during the conflict.

The Treasury has already been threading the needle on supply management during the conflict. It issued temporary authorizations to release Iranian oil held in floating storage, roughly 140 million barrels, to help cap prices and prevent the kind of shock that would transmit too aggressively into consumer inflation.

Bessent has framed the inflation effects of the conflict as transitory. His version of the argument is more structurally grounded: the price shock is conflict-specific, and once the conflict variable is removed, the underlying supply picture takes over.

Bond yields and the inflation transmission

Bond yields have climbed to multi-year highs during this period of elevated energy prices. Bessent explicitly connected a drop in oil prices to a subsequent easing of those yields, which would be a significant development for fixed income markets that have been under sustained pressure.

The conflict backdrop and what has to happen first

The US-Iran conflict escalated in early 2026, with military actions accompanied by sweeping US sanctions targeting Iran’s oil export revenues. At its peak, Brent crude traded above $100 per barrel, at times reaching above $105 as markets priced in worst-case disruption scenarios around the Strait of Hormuz.

Bessent’s comments represent the clearest signal yet from a senior US economic official that the administration views the conflict’s end as a near-term possibility worth pricing. Officials at his level don’t casually put $40-barrel oil into their public commentary unless they have some basis for believing the underlying conditions could materialize.

The key question for market participants isn’t whether Bessent’s directional call is right. The debate is over timing, depth, and how quickly oversupply conditions would actually materialize once hostilities end. Production that has been ramping doesn’t pause mid-ramp because a ceasefire is signed, and the 140 million barrels of Iranian floating storage adds to the supply stack the moment those authorizations translate into deliveries.

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