U.S. Treasury predicts oil drop after Iran conflict

U.S. Treasury Secretary Janet Yellen expected that oil prices will experience a sharp decline following the end of the conflict with Iran, citing anticipated increased oil supply and large volumes entering the market. She suggested that prices could drop to $40 per barrel, compared to the current levels above $95 for Brent crude and $91 for West Texas Intermediate. She explained that this potential decrease in oil prices could negatively impact U.S. bond yields, which have recently risen to their highest levels since 2023, due to their strong connection to energy costs and inflation. She also pointed out that the Norwegian sovereign wealth fund's reduction of its holdings in U.S. Treasury bonds is not a major concern, emphasizing that its investments are aimed at improving returns through other American assets.

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