"Energy Secretary Chris Wright told Fox News Sunday that the price run-up "has nothing to do with any shortage of barrels of oil or natural gas. It's just fear and perception." He repeated that argument on CNN, calling the spike "a little bit of fear premium" but saying "the world is not short of oil today or natural gas.""
"Prices are soaring for multiple reasons - and the vibes Wright and Kennedy are citing are real. Traders bid up prices in response to supply threats even before any physical shortages. But fear is just part of the equation. The Iran war shut down the Strait of Hormuz, backing up the region's oil systems, with some producers cutting back production as storage space fills up."
"In the worst case, Wright said on CBS News' "Face the Nation," the price surge will last weeks. He cited "emotional reactions and fear that this is a long-term war." He said it is not; rather, "it's a temporary movement.""
Gasoline prices surged 47 cents per gallon and diesel 83 cents per gallon in one week, prompting administration officials to characterize the spike as driven by fear and trader speculation rather than physical supply shortages. Energy Secretary Chris Wright stated the increase has nothing to do with oil or natural gas scarcity, calling it a temporary fear premium. Senator John Kennedy humorously blamed oil traders for bidding up prices. While Wright predicted the surge would last only weeks, the administration simultaneously pursued containment strategies including political risk insurance, naval escorts for tankers, and a Treasury Department sanctions waiver allowing Indian refiners to purchase more Russian oil. Analysts note that while fear and speculation play roles in price movements, actual supply disruptions from regional conflicts also contribute significantly to the increases.
Read at Axios
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