Energy Secretary Chris Wright Talks Fuel Prices

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

Kailey Leinz (0:07)

Joining us now live from the convention hall is the US Energy Secretary, Chris Wright.

Mr. Secretary, welcome back to Bloomberg TV and radio. As we speak, and as this convention kicks off, it is against a backdrop of higher crude prices once again, with Brent topping $100 a barrel today. Diesel, of course, is at a record, marching towards $6 a gallon. When can Republicans credibly tell the American people that that situation is going to get better?

Chris Wright (0:39)

Well the problem is more than oil prices. The bigger problem is refining capacity. Under the Biden administration, they closed over a dozen refineries in the US. Gavin Newsom has closed two more large ones in the last 12 months in California.

We're rowing the other direction. We're going to expand American refining capacity. I think we'll see gasoline prices go down in the coming weeks. Diesel is a bigger challenge, but we're working on it aggressively every day. Every day.

Kailey Leinz (1:08)

Well, can you give us some detail as to what exactly that effort entails? How much of this is simply a factor of things that are beyond you as Energy Secretary's control, like, for example, Ukraine going after Russian refineries? Are there limits to what you're able to do to address this?

Chris Wright (1:28)

Yeah, they're Ukrainian attacks on Russian refinery. They're probably the single biggest problem with diesel. Russia was a large exporter of diesel. Now they're not exporting anything. Russia was an exporter of gasoline, and now they're a meaningful importer of gasoline.

China has also crimped back on their refining capacity.

That's pushing upward pressure on global prices. But in the United States, we're changing regulations, allowing our refiners to produce more. We're investing in Venezuela to see both their oil production go and restore some of their refining capacity. We've done Jones Act waivers to make sure California and New England have supplies of fuel that are critical for their livelihoods. So we're doing everything we can, and I think you will see this roll over and prices headed down. But these are big challenges. Thank god we have an energy addition Trump administration, or we'd be in a world to hurt right now.

Kailey Leinz (2:26)

Well, of course, this administration, while it has pushed for greater American energy, it also has decided to prosecute this war against Iran. Given the hostilities that we have seen flare up once again, in just the last several days in that region, the US yesterday attacking five Iranian tankers, has that had a direct impact on what is able to get out of the Strait of Hormuz? You have an updated figure for us, the latest figure, from yesterday or today.

Chris Wright (2:55)

I do. The data as of this morning, we're at the highest since the start of the conflict, just under 11 million barrels a day, seven day average of oil and oil products going out of the Strait on ship, on water, and then another three to five million barrels a day from the bypass pipelines. So we continue to grow the oil and oil products coming out of the Gulf.

The American Navy is doing a phenomenal job there, so a lot of good progress there. But I gotta say, a lot of Americans don't fully appreciate what we're doing. Iran is not that far away from a nuclear weapon. If the president had taken the politically easy route and said, I'll just kick this can down the road to my successor. Imagine a world where death to America, the biggest troublemaker in the world is now nuclear armed. That's just not an acceptable outcome. It might be politically convenient to forget about Iran for a little bit, but this president is about leadership, about solving problems now, and handing a better world to our children and our grandchildren.

Kailey Leinz (3:58)

Well, so as you say, 11 million barrels has been able to make it out of the strait. Do you foresee, have you heard from commercial entities that they're more hesitant to transit if there seems to be tanker-oriented attacks that are being perpetrated by Iran and by the United States? Does that create greater uncertainty for these commercial operators?

Chris Wright (4:23)

No, it is still a conflict zone in the strait. There's no doubt about that.

The transits are happening because of the US. Navy.

So these are either national fleets from the Gulf nations. Some of these are commercial fleets, but they're on the aggressive side for sure. We're going to continue to ramp that up. We need a change in regime or a change in the policy of the Iranian regime to ultimately return to normal. But that will be to the enormous benefit of generations of Americans. It is a tough problem. Thank God we have a tough president who's thinking long term about energy and economic security for America and the world.