US Energy Chief: Iran Conflict to End Soon, Oil Impact Limited

Speaking at a Wall Street Journal policy discussion, US Energy Secretary Chris Wright said the situation would not trigger prolonged economic strain despite a temporary spike in fuel prices.

"I think the conflict will be resolved in the next few weeks," Wright said, adding that the US economy entered the crisis "in a very strong place."

He argued that current fuel prices remain manageable in comparison to recent history. "As we sit here today, we're a little over $4 price of gas... we had $5 gasoline... four years ago," he said.

Wright maintained that strong domestic investment and manufacturing momentum would cushion any external shocks. "There is a lot of economic momentum in this country that's pretty much unimpacted by this," he noted.

On the supply side, the US has already coordinated a large-scale response with global partners. Wright said a "$400 million coordinated release" of oil reserves was underway to stabilise markets, though he stressed that the disruption was more about supply flow than overall volume.

He added that the release would take months to fully materialise, but "before that release is done, the conflict will be long over."

The secretary also underscored the resilience of US energy production, noting that the country is the world's largest producer and exporter of oil and natural gas. This, he said, allows Washington to support allies facing shortages.

"One of the biggest things is how can the United States help mitigate this globally... by sending products abroad and... tapping the accelerator... on American production," Wright said.

He indicated that Iranian oil exports could fall sharply if the blockade holds. "You will not see any more Iranian oil... go out of the Gulf anymore," he said, adding that Iran would likely shut in production due to limited storage capacity.

At the same time, alternative supplies are emerging. Wright pointed to a rapid increase in Venezuelan output, which has risen by about 25 per cent in recent months, helping offset global demand growth.

"World demand... grows about a million barrels a day per year... we've already got the equivalent... out of incremental Venezuelan production," he said.

He described Venezuelan crude as well-suited for US refineries, calling it "an awesome oil for American refineries."

Beyond the immediate crisis, Wright emphasised the strategic role of US liquefied natural gas (LNG) exports, particularly for Europe and Asia. He noted that LNG shipped abroad commands prices several times higher than domestic gas, creating strong incentives for continued expansion.

"It's hard to overestimate the immensity of American natural gas reserves," he said.

The remarks come as global markets remain sensitive to disruptions in the Gulf region, a critical artery for energy supplies. Any prolonged conflict could tighten supply chains and push up prices for major importers, including India.

India, which imports over 80 per cent of its crude oil needs, is particularly exposed to volatility in West Asian energy flows. Past disruptions in the region have triggered inflationary pressures and strained fiscal balances in New Delhi.

However, increased US exports and diversified supply sources, including from Latin America, have in recent years provided some buffer against sharp shocks in global oil markets.

- IANS