Thursday, during an appearance on FBN’s “Varney & Co.,” White House National Economic Council director Kevin Hassett predicted a robust recovery from high energy prices once the Strait of Hormuz was fully reopened.
“You’ve got to look at the numbers,” Fox Business host Stuart Varney said. “I mean, you’ve got an average for regular now of $4.30 a gallon. It was up 7 cents overnight. And diesel’s gone to, what, $5.50, $5.60. That hits voters hard. All kinds of voters react to that. It’s a negative. How long are they going to stay at that level? Can you give us any idea about when they’re going to come down?”
Hassett replied, “Well, if you look at the situation in Iran, the Iranian economy is completely on the ropes. They’re having a hyperinflation. They’re running out of food. A huge amount of the feed that goes into their animals is imported through the Gulf and having trouble getting through. And so there’s an enormous amount of pressure for Iran to open up. And when they do, as you saw, President Trump really broke OPEC because the UAE has left OPEC, and they have a massive amount of excess capacity.”
“So as soon as we get the Strait open, that oil is going to flow like you’ve never seen before,” he added. “So I think that futures markets expect prices to go down a lot, but I think that they’re underestimating the effect of increased supply once the Strait is open.”
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