Bessent questions price reaction as traders await oil flow signals
Treasury Secretary Scott Bessent, asked on CNBC why oil had moved on the announcement, said he was “not sure why oil has popped up on this.” He added: “If we are doing maximum economic pressure then that means that likely there will not be a large-scale kinetic restart.”
Baron Lamarre, co-founder of Index Litro and former head of trading at Petronas, said traders are taking the administration’s words seriously but waiting for actual changes in oil flows. “It’s noise, but it doesn’t change the fundamentals of markets at all,” Lamarre said. “We want to see if there’s any significant change in terms of the flow of oil.”
Lamarre said the market has reached a “sort of equilibrium” in which alternative shipping routes and ship-to-ship transfers of crude to avoid the Strait of Hormuz are keeping operations running, even if not as smoothly as before the confrontation. “Operations aren’t as disrupted as much as before,” he said.
Ritterbusch & Associates said in a research note that the September contract’s “stronger-than-expected” expiration “now provides an easy upside target to the October contract.” The firm cited the “continued virtual closure of the Strait of Hormuz” and “stalled diplomatic efforts to reopen it” as supporting a bullish view, noting that “Iran remains dug in while the U.S. has shifted strategy from a bombing campaign to economic isolation that may or may not spur concessions from Iran.”
Earlier in the session, before the moves accelerated, WTI was off 0.1% at $86.76 a barrel and Brent was 0.1% higher at $93.87.
In corporate news, ttb wealth securities analyst Yupapan Polpornprasert raised her price target on Thai petroleum and energy conglomerate Bangchak Corp. to 60.00 baht from 41.00 baht, maintaining a buy rating. Polpornprasert cited stronger-than-expected performance in Bangchak’s refinery and non-refinery businesses, with the Singapore gross refining margin — used as a benchmark by the Thai company — running higher than expected. The brokerage said uncertainty around the Strait of Hormuz and ongoing refinery disruptions in Russia continue to constrain global refined product supply, and that the refinery market outlook remains bright with limited new capacity additions expected over the next few years. Bangchak shares were 5.8% higher at 50.25 baht.
The August 21 rally extended the gains from the previous session, when oil futures climbed after Trump first announced “unprecedented economic measures” targeting Iran, with the Treasury secretary on August 21 elaborating the strategy rather than introducing new measures.