Bessent cites Ukraine, Iran war for global energy shock
- Scott Bessent blames Ukraine's strikes on Russian energy assets for global price pressure
- Brent crude trades near $95/barrel as Hormuz traffic drops to four vessels daily
- US gasoline inventories fell 1.2 million barrels; pump prices exceed $4/gallon
- July CPI rose 3.4% YoY while core inflation held at 2.5%
- Ukraine's Gerashchenko argues Iran war impacts markets more than Kyiv's actions
*this image is generated using AI for illustrative purposes only.
US Treasury Secretary Scott Bessent attributed the current global energy shock partly to Ukrainian attacks on Russian infrastructure, arguing these strikes compound price pressures from the ongoing US-Iran conflict.
Ukraine Strikes and Supply Constraints
Bessent stated on Fox & Friends that Kyiv’s decision to target Russian energy assets and refined properties is creating upward price pressure globally. This comes as Ukraine intensifies drone strikes on Russian refineries. Reuters reported that Moscow cut its 2026 oil-output forecast to 9.88 million barrels per day, a 17-year low. These attacks have contributed to gasoline shortages and forced Russia to restrict fuel exports.
Hormuz Disruption Elevates Prices
The Iran conflict poses an immediate threat to global supplies. Brent crude traded near $95 a barrel Thursday following renewed US-Iran strikes. Traffic through the Strait of Hormuz dropped sharply, with only four vessels crossing compared with a 10-day average of 13. Before the conflict, the waterway handled roughly one-fifth of global oil shipments.
| Metric | Value | Context |
|---|---|---|
| Brent Crude Price | $95/barrel | Post-strike trading |
| Hormuz Vessels | 4 | Daily count vs 13 avg |
| US Gasoline Inventories | -1.2 million barrels | Weekly fall |
| Average Pump Price | Above $4/gallon | August record |
Consumer Impact and Inflation Data
The supply squeeze has affected US consumers. Reuters noted that gasoline inventories fell 1.2 million barrels last week. Average pump prices stayed above $4 a gallon throughout August, marking a record for the month. Bessent acknowledged prices are "too high" but claimed core inflation is "very under control." July CPI rose 3.4% year over year, while core inflation was 2.5%, according to the Bureau of Labor Statistics.
Political Pushback
Ukrainian official Anton Gerashchenko pushed back against Bessent’s remarks, arguing the Iran war has affected energy markets "significantly" more than Kyiv’s strikes. Bessent continues to escalate economic pressure on Tehran, stating Iran’s economy could collapse "within weeks or months." He also argued the Strait of Hormuz could become a "worthless piece of water" within two years as new pipelines bypass it.
How might the US Treasury's stance on Ukrainian strikes influence future aid packages or diplomatic pressure on Kyiv regarding its military strategy?
What specific alternative pipeline projects or trade routes are being accelerated to bypass the Strait of Hormuz, and what is their realistic timeline for operational capacity?
If Brent crude sustains levels near $95/barrel, how likely is it that core inflation will rebound above the Federal Reserve's 2% target in the coming quarters?
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