US Energy Secretary Chris Wright Talks Saudi Oil Pipeline & Iran War

SPEAKER_1 (0:02)

Bloomberg Audio Studios, podcasts, radio, news.

SPEAKER_2 (0:07)

The Iran and Gulf states delaying talks on a temporary shipping lane through the Strait of Hormuz, and Saudi Arabia closing a key alternative route. Joining us now to discuss is the US Energy Secretary, Chris Wright. Mr. Secretary, thank you for your time this morning. We appreciate it. A critical juncture to have this conversation on Middle Eastern energy exports. What is your peers in the Middle East? What are the energy secretaries across the Middle East, including policy makers in Saudi Arabia, saying about what's going to happen to the East-West pipeline?

Chris Wright (0:37)

Well, look, this is not new for strikes on this energy infrastructure. And of course, unfortunately, Iran's done a ton of that, but they've proven resourceful in the past. I think you'll see the pipeline back running very soon.

SPEAKER_4 (0:49)

Have you spoken to your Saudi counterpart? Why do you think very soon? Can you give us a time frame?

Chris Wright (0:55)

I might have more of a time frame tomorrow, but yes, I've been in close contact from him since hours after the attack started. And so they've been very carefully assessing what the damage was, what needs to be done, and I think more clarity on that will come out very soon.

SPEAKER_4 (1:10)

As you know, Secretary Wright, that's 7 million barrels a day in terms of capacity. How much right now do you see oil flowing through the Red Sea, which with the Bab el-Mandeb Strait and the Houthis really asserting more of their power, how much do you see flow of energy through that passageway?

Chris Wright (1:29)

Well, there's been a few million barrels a day going through, but most of it has not gone through the Bab el-Mandeb. Most of it has gone the other way, through the Suez Canal and the pipeline there in Egypt.

So look, energy gets to markets. I just got the latest data from last night and flows through the Strait. Over 12 million barrels of oil and oil products flowed through the Strait of Hormuz last night. The running 7-day average is over 10 million barrels a day. And on a gradual upward trend. We will see continued increase in energy flows out of the Arabian Gulf region. That will not be stopped by any activity Iran does. Bumps on the road, of course, but those are temporary bumps.

SPEAKER_4 (2:08)

When it comes to the Strait of Hormuz, 12 million barrels a day is north of what you said just a few weeks ago of 10 million barrels a day. How are those vessels getting out?

Chris Wright (2:16)

So just to clarify, I often give 12 million is yesterday. The running average is a little over 10 million barrels a day.

But I think you'll see that running average continue to go up. So these ships are escorted by the US Joint Force.

They're defended. They're mostly done at night. Of course, all the transponders are turned off, which is why the commercial shipping monitors just haven't had an ability to see it. And people think, I give another opinion. Every morning, I get a report of every single ship, the ship name, exactly what its cargo was, and then it transited. So ours aren't estimates or guesses or magic math. I've heard all sorts of just hilarious critiques. It's just a serious reporting of exactly what's happening.

SPEAKER_4 (3:00)

Does that report also give you a breakdown of what is crude and what is oil product?

Chris Wright (3:05)

It does. It does. I combine crude and oil products. We also get reports on LNG and other products that are going out. I've confirmed my public disclosures to just oil and oil products.

SPEAKER_5 (3:15)

How much are you seeing the Middle East is the source of some of the increase that we've seen in diesel prices in the United States, up some 30% over the past couple of months? Is that really coming from the Middle East? Or, as President Trump said yesterday, is that really due to Ukrainian attacks on Russian facilities?

Chris Wright (3:33)

So it's a combination of all of the above. And that is one of our focuses in the Middle East, is to get more refined products out of the region. You'll see an upward trend on that. We are getting some, and it's not trivial, but we want to see even more come out of the Middle East. But yeah, obviously there's been a huge disruption in Russian diesel exports. They were a meaningful exporter of diesel. Today, they're not exporting any.

Russia was a small exporter of gasoline. Now they've become a meaningful importer of gasoline. So refining is tight in the Middle East. It's tight in Russia. Heck, Gavin Newsom managed to close two significant refineries in California in the last 12 months. So those are just own goals from Democrat climate policies. They think somehow hobbling our energy system does something good for the world. It doesn't. President Trump is just dead set on putting the American people and the American economy first. And we'll focus on energy addition. Even during these crises, you'll see progress in the production and ultimately progress on prices.