US petrol prices are expected to fall after the summer driving season, but Energy Secretary Chris Wright stopped short of guaranteeing a return to three dollars a gallon by 20 September as the Iran conflict continues to disrupt global fuel markets.
Speaking on Sunday, Mr Wright said demand should ease after Labor Day and that recent regulatory changes would allow American refineries to produce more petrol and diesel using existing equipment.
“Seeing demand likely go down in the next few weeks and supply going up, I think prices headed downward is not an unreasonable expectation,” he said.
His comments came as petrol prices reached a record level for the Labor Day weekend, while diesel climbed to $5.89 a gallon. The national average for petrol has risen to about $4.08 a gallon, roughly 28 per cent higher than a year ago, according to figures reported by the Associated Press.
Mr Wright blamed the pressure on fuel markets largely on a shortage of global refining capacity rather than the price of crude oil alone. He said Russian refineries had suffered heavy damage during the war in Ukraine, leaving Moscow unable to export diesel and forcing it to import petrol.
The secretary said the administration was considering “all options” to protect American consumers, including restrictions on fuel exports, but was currently prioritising increased domestic production.
“The way to solve a supply shortage is to grow supply,” he said.
Iran conflict keeps pressure on oil markets
Mr Wright also defended the administration’s approach to Iran, saying diplomatic efforts remained open but that the US military was seeking to prevent Iranian crude, gas and related products from reaching international markets.
He said the policy was intended to pressure Tehran into changing course or bring about a change of government, while insisting that President Donald Trump’s preferred outcome remained a negotiated settlement.
Crude oil is currently trading at about $90 a barrel. Treasury Secretary Scott Bessent has predicted that prices could fall to between $40 and $50 once the conflict ends and disrupted supplies return to the market.
Mr Wright said lower prices would depend on removing obstacles to production in Alaska, the Gulf of America, Canada and Venezuela. He acknowledged, however, that expanding refining capacity would be a more difficult and time-consuming challenge.
“Every month, production is growing,” he said, while offering no firm timetable for a return to pre-war prices.
The administration has also placed increased emphasis on Venezuela, following a new agreement designed to attract American investment into the country’s oil industry. The US Department of Energy said agreements signed in Caracas on 2 September with Chevron, Eni and GE Vernova would expand production, modernise the electricity grid and unlock billions of dollars in private investment.
The deal gives the US majority control over an estimated 65 billion barrels of Venezuela’s proven oil reserves, according to the department. Mr Wright said it would provide discounted oil and an ownership interest in production without cost to American taxpayers.
He described the arrangement as a benefit to both countries, arguing that greater investment would create jobs and tax revenue in Venezuela while helping to reduce energy prices in the United States.
The agreement has nevertheless raised questions over its political durability. Venezuela is currently led by an unelected government, and Washington has said that free and fair elections, secure voter rolls, the release of political prisoners and the restoration of the rule of law remain priorities.
Pressed on when elections would take place, Mr Wright gave no date. He said talks were under way between opposition figures and the authorities and maintained that elections were “coming”.
For American motorists, the immediate outlook will depend more on the end of the summer driving season and the performance of refineries than on Venezuela’s longer-term production plans. Sunoco chairman Ray Washburne, appearing on the same programme, said refineries were operating at about 98 per cent and expected demand to remain broadly flat through the autumn.
He said oil traders were already pricing in a fall over the next year, provided the wars in Iran and Ukraine did not continue to restrict supplies.
