US Energy Secretary Chris Wright credited the country’s shale revolution for keeping the market resilient during the 12-day conflict between Israel and Iran in June.
“We showed that we’re … much more resilient than we were in the 1970s to [shocks on] oil prices,” he said during a moderated discussion at the Council on Foreign Relations in Washington.
“We need oil production all around the world, but the US being by far the largest producer … has been a stabiliser on oil prices.”
Global oil prices soared after Israel struck Iran on June 13, a significant escalation of regional tension, with the benchmark Brent crude rising more than 10 per cent before settling around $74 a barrel.
The price of Brent has since dipped to $65.61 as of 3pm ET Friday as those fears have abated. West Texas Intermediate, the gauge that tracks American crude, was trading 2.35 per cent lower at $61.99 per barrel.
But the back-and-forth between the rivals and US intervention sparked fears that the US could see a sharp increase in petrol prices similar to the price shock consumers experienced in the 1970s because of the oil embargo and the Iranian Revolution.
By 1974, US inflation had reached 12.2 per cent.
“The highest inflation we’ve experienced in the United States was in the 1970s because of threats, and real and perceived threats on oil supply out of the Middle East, and the world runs on oil. That drove huge inflation,” Mr Wright said.
He pointed to the US shale revolution for helping stabilise the market, which has seen the US become the world’s largest producer.
Data released by the Energy Information Administration (EIA) showed the US field production of crude oil averaged 13.58 million barrels per day in June, surpassing its previous record set in October 2024.
Oil prices “have been volatile in the last five years, but less volatile than they were before”, Mr Wright said.
“I hope we … continue to see a reduction in the volatility of oil price, and I hope a reduction in the inflation adjusted average price of oil going forward as well.”
Artificial intelligence
Mr Wright also expressed concern about rising electricity prices, blaming the trend on policies centred around climate change.
This comes as President Donald Trump’s administration has made significant announcements on artificial intelligence – notably through the Stargate project and massive investment in Pennsylvania’s AI sector – that require enormous amounts of energy.
“People are angry today, rightfully so, because the policies of Europe got adopted here we’ve had a relatively rapid rise in our electricity price,” he said.
Mr Wright said previous policies led to a net shrinkage of 78 gigawatts in the US energy system, putting the US at a disadvantage against China in the AI race. Those concerns echo similar worries allies close to the Trump administration have made.
“If we want to stay ahead of China and AI, we need to grow our firm generating capacity by at least 100 gigawatts,” he said.
Source: The National