Treasury Secretary Scott Bessent stated he did not understand the recent spike in oil prices, dismissing the 24-hour volatility as market noise while reaffirming confidence in declining bond yields.

The remarks followed a sharp rise in energy costs, with Brent crude futures climbing 2.4% to close at $93.78 per barrel on Thursday. West Texas Intermediate (WTI) futures for October delivery also increased, rising 2.7% to $86.64.

Political Backlash Intensifies

Rep. Ro Khanna (D-Calif.) criticized the administration's stance, attributing the price surge to President Donald Trump's military actions against Iran. Khanna argued that Americans were bearing the cost of a war he described as lacking a plan.

Rep. Ted Lieu (D-Calif.) echoed this sentiment, suggesting the high oil prices resulted from an unconstitutional action starting with "W" and ending in "R." Hedge fund manager Spencer Hakimian also mocked Bessent's comments regarding the Strait of Hormuz.

Geopolitical Context and Supply Risks

The price movement coincides with ongoing tensions threatening energy supplies through the Strait of Hormuz. Approximately 20% of the world's oil and liquefied natural gas transit through this waterway.

Bessent indicated that the administration would implement "the toughest sanctions in history" against Iran. He suggested these economic measures would ultimately lower oil prices sooner than expected. The U.S. and Israel launched strikes on Iran in February, aiming to prevent nuclear weapon development. Two ceasefires reached in April and June have since been broken.

What the Numbers Show

The simultaneous rise in both Brent ($93.78) and WTI ($86.64) benchmarks indicates broad-based upward pressure across global crude markets rather than a regional anomaly. The magnitude of the moves (2.4% for Brent, 2.7% for WTI) within a single trading session reflects acute risk premium pricing amid geopolitical uncertainty, contrasting with Bessent's characterization of the event as mere noise.

The U.S. military has reportedly established a "stealth" shipping corridor in the Strait of Hormuz, moving approximately 10 million barrels of oil daily through a southern channel along Oman's coast. This operation, which has been active for several weeks, transports about half the region's pre-war volume into the global energy market, according to Axios.

Covert operations and strategic control

Each night, 15-20 tankers traverse the strait via this southern route. A recent two-week U.S. CENTCOM campaign weakened Iran's radar and maritime surveillance, significantly reducing its ability to monitor traffic in the area. The U.S. military is also aiding empty tankers to enter the Gulf from the Arabian Sea, load oil, and exit under protection.

A task force at Fort Bragg, North Carolina, coordinates with Gulf partners and tracks daily ship movements. A U.S. official stated that the U.S. has been controlling the southern lane for two months and that the Islamic Revolutionary Guard Corps (IRGC) does not control the strait.

Market impact and analyst view

GasBuddy Analyst Patrick De Haan described the development as major if accurate, noting that the daily volume moved exceeds what is released via the Strategic Petroleum Reserve (SPR). The previously authorized 172-million-barrel SPR release is nearing completion, with reserves expected to remain above 275 million barrels.

At the time of writing, Brent crude oil futures were trading 2.63% higher at $94.04 per barrel, while WTI crude futures were trading 2.80% higher at $88.23 per barrel.

Key details at a glance

President Trump stated on Wednesday that the U.S. is not currently negotiating with Iran, calling talks a "waste of time." He noted that Iran is a "shell of themselves" while highlighting the tremendous amount of oil flowing through the strait.