Bessent says Treasury is not intervening in oil commodities markets and has no authority to do so
On Monday, Treasury Secretary Scott Bessent made it clear that the administration has no intentions of intervening in financial markets, and may not even have the authority to do so if they wanted to. In an interview with CNBC, Bessent addressed speculations that the Treasury Department or another government entity might step in to lower oil prices.
While past presidents, including President Donald Trump, have authorized releases or exchange loans from the Strategic Petroleum Reserve during times of energy sector stress, interfering in futures markets or using other mechanisms would be unprecedented. The concept would involve the Treasury intervening in oil futures markets by trading against rising prices, a move that would likely spark controversy as it targets financial markets rather than the physical supply of oil.
Bessent acknowledged the rumors circulating in the market, stating, “When there’s big dynamic price action, that always happens. We haven’t done that.” When asked if this intervention is being considered, Bessent replied, “I’m not sure under what authority or what auspices.”
Oil prices saw some stability on Monday, with U.S. crude trading 1.9% lower at $96.86 a barrel and international benchmark Brent crude slightly higher at $103.15.
It is evident from Bessent’s statements that the Treasury is not planning to intervene in financial markets to control oil prices. This decision is in line with the administration’s hands-off approach to market interventions. Investors and market participants will be closely monitoring any developments in the energy sector to gauge the impact on oil prices.
