Chris Wright, the US Energy Secretary, recently stated that oil prices reaching $200 per barrel is “unlikely.” At the same time, the Trump administration also admitted that they are focused on military operations and a prolonged war could lead to extreme scenarios. On the other hand, Iranian officials are openly threatening the $200 mark as a consequence for waging war against the Islamic Republic.
The US President has been briefed by the Energy Secretary and major oil and gas players about the price dynamics. The introduction of emergency measures was also considered by the Trump administration. An energy company representative who chose to remain anonymous called the situation “all hands on deck mode.” All of this was done to discuss the consequences of a fallout from oil prices reaching $200 per barrel.
A source told Politico that the US government is now thinking about all options to reduce energy prices. However, a White House representative denied reports that the US believes oil prices will reach $200 per barrel. The conflicting situation indicates that the major energy players and high-ranking officials are scrambling for a solution. The war has now entered its fifth week with Trump threatening further strikes on Iran.
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Still Too Early For $200 Per Oil Barrel Talks, Says Analyst
Oil market analyst Rory Johnston said that it is too early to assess the impact of the war on the markets. “That wave is expected to hit the US in about two weeks,” which will be “very hard on consumers,” he said. Johnston explained that in mid-April, prices of essential commodities could surge if the de-escalation in the Middle East fails. It is then that the oil to $200 per barrel discussions could come out in the open.
Since the conflict broke out, oil prices have increased by $1 per gallon in the US. Diesel fuel prices increased by $1.5 from $3.75 to $5.4 per gallon at the same time. If $200 oil per barrel hits the global market, the world’s economy will be in tatters. Rising prices, job cuts, and stock market crashes will be the new reality that people will have to endure.