Energy Secretary says Trump was "aware of the risks to energy flows" before launching Iran war

[0:00] We begin with one of the Trump administration officials tasked with working to lower those [0:04] high gas and oil prices, Energy Secretary Chris Wright. Good morning to you. [0:09] Good morning, Margaret. [0:10] So it's good to have you here. You said this past week that Americans can expect [0:15] lower gasoline prices and diesel prices by election day. [0:19] The Wall Street Journal editorial board has a piece outlining that the campaign to squeeze [0:25] Iran financially is working, but they can still knock out significant Gulf energy [0:31] infrastructure. They could be planning an October surprise before the U.S. midterms. [0:36] We are still seeing Iranian attacks on ships now. I mean, how can you be so confident prices [0:42] are headed down? Well, because we've got increasing supplies coming out of the Strait of Hormuz, [0:47] and they've continued to rise over the last months, over the last recent weeks. [0:52] We've got U.S. gasoline production today at record high. We have demand for gasoline as we come out [0:58] of the summer driving season starting to go down. Similar stories with diesel. Diesel's mostly been [1:04] infected by the Russia-Ukraine war and also by China's decision not to export diesel or gasoline [1:10] into the marketplace. And of course, we're living with two refineries that were recently closed, [1:15] large refineries in California that Gavin Newsom forced the closure of. And frankly, [1:21] 15 years of Democrat policies that have been energy subtraction, trying to close coal plants, [1:26] close refineries, and shrink our capacity, which means when you get in crisis, we're just less [1:32] resilient than we should be. But you still think that in the next four weeks, prices are going to [1:37] go down? Absolutely. Diesel prices have been going down. Gasoline prices have been going down. I expect [1:42] that to continue. I want to talk about diesel in a minute. But I was reading that the U.S. was sending [1:47] more defensive equipment to the Gulf countries to protect their oil infrastructure. I see there [1:53] was a gathering of national security advisors at Camp David on Friday to talk about Iran and the [1:58] conflict in Yemen. Can you share any outcome from that? I mean, is the U.S. about to escalate? [2:05] We did just see a third carrier strike group get sent to the region. [2:09] Look, the president has taken a strong stand that Iran, the world's greatest terrorist regime, [2:15] cannot and will not have nuclear weapons. So, of course, we're looking at every avenue to achieve [2:22] that goal economically, to be prepared for what comes militarily. But we cannot pass to the next [2:29] administration and Iran armed with nuclear weapons. Not only is that a threat to peace and stability, [2:34] that's a massive long-term threat to energy prices. Right. But he's also said that they're not [2:38] seeking a nuclear weapon. He said that just the other day, that they might have actually already [2:42] stopped. But in the immediate sense of threats to our neighbors who have refinery and production [2:48] capacity, how do you guarantee that there is no October surprise that sends those prices going [2:53] the opposite direction? Hey, well, there's no guarantees. There's no guarantees in conflict. [2:57] There's no guarantees in life. But everything we're doing is to grow the supply of diesel, [3:02] to grow the supply of gasoline, and frankly, again, to reverse years of policies that [3:08] have been directed at exactly the opposite, to shrink our ability to produce, refine, [3:13] and deliver hydrocarbons. Can you say whether the president has decided he will escalate [3:17] post-election day? That's when that third carrier strike group will be arriving, mid-November. [3:23] Well, I'm definitely not going to get in front of the president's plans or policies. [3:27] But remember- He's thrown that out there himself. [3:28] He's always planning for contingencies, and he's always negotiating. How you communicate, [3:35] what you lean in on, it sends a message to the other side. He's been a master, a master at doing [3:42] that. So he's got both tracks still going, diplomatic and military pressure. Of course, [3:45] of course, at all times. Okay. You talked about diesel. The world's wealthiest countries, [3:50] the G7, this past week agreed to release 100 million barrels of fuel over four months. They're [3:56] going to front load it with a lot of diesel in the next 20 days. I know you asked our friends [4:00] and allies to consider doing this. How significant a price impact and for how long? [4:07] It's a big deal. It's a big deal. Europe has very large diesel stores. [4:12] They don't refine enough diesel to supply their own economy, so naturally they store a lot of diesel. [4:18] They're very keen to see American diesel continue to flow to Europe. They've got a lot of diesel in [4:23] stores. Why not release some of that? This is what you store diesel for. When all the Russian exports [4:29] of diesel are shut down, when the Chinese have said, we're not going to deliver any more diesel, [4:34] and you still have a reduction of diesel flows coming out of the Gulf, but we're restoring those, [4:39] but that takes time. This is just common sense. This lowers diesel prices, not just in the United [4:43] States, but it lowers them in Europe and around the world. But it will drive diesel prices down as [4:48] those releases come. It'll drive diesel down through the winter in the United States and around the [4:53] world. And by then, we'll be in another place. We'll have more refining capacity online. [4:57] I suspect we'll continue to see diesel decline as we go into next spring as well. [5:03] So below $6, which is where it is. [5:05] Yes. [5:06] Yeah. By post-term terms? [5:10] It's down a little over 20 cents so far. I think you'll see it continue to go down. Yeah, [5:15] you should see it below $6 before too long, but exactly when? I certainly don't know that. [5:19] So the allies did this after President Trump said he was considering a diesel export ban. [5:25] You had so many quotes where you were telling people this was not a good idea. Let's not do [5:30] a diesel export ban. But the president kept saying it was a consideration. Has he completely ruled out [5:36] an export ban at this point? Look, every day he's throwing out ideas. He's engaging with [5:42] discussions with me, others in the administration. Even when you're saying it's not a good idea? [5:46] Absolutely. No, he's a figure. You're the expert. [5:49] He says, well, but there's different ways to slice this cat. There's different ways to look at it. [5:53] He's always looking, how do I lower energy prices? How do I lower heating prices, [5:57] electricity prices, gasolene prices, diesel prices? In fact, I would say his constant [6:02] communication of that may have been quite helpful in achieving the deal we just struck. [6:06] Because people thought he might actually not listen to you and go ahead and do it? [6:11] That was the ploy, essentially? It wasn't a ploy. It's just a constant dialogue about the many [6:17] levers we have. How can we drive down diesel prices and drive down gasoline and other prices along with [6:23] it? So we checked, and it looks like because of this Lindsey Graham bill that gives the president [6:31] more sort of powers to punish the buyers of Russian fuel, he has to make a decision by October the 18th [6:40] as to whether he's going to put tariffs on the biggest buyers. That would be China and that would [6:44] be India. Is he going to do that? Look, he leaves every decision till the end. He'll evaluate the [6:51] trade-offs. He has worked ceaselessly to try to end this war. Not only would ending this war end the [6:59] killing of tens of thousands of people every month, it would dramatically lower energy prices. He's [7:05] wanted to end that conflict since before he was president. And there is constant, constant dialogues [7:12] with both sides in that to try to bring that war to an end. But at this point, like, what's the [7:18] direction here? You just had this big state visit. Are we actually in a position where the U.S. might put [7:22] tariffs on China for buying Russian oil? Are we actually going to see that? And what impact would that [7:29] have? Again, I won't get in front of the president on that. We're trying to have the best relations we [7:34] can. I'm sure you've looked at the projections on what it would do for pricing. Of course, we're [7:37] trying to have great relations with China and move that ball forward. I think things are going [7:41] reasonably well there. But then the flip side is you've got to look at every leverage you've got to [7:46] bring a murderous conflict to an end. So he may. And you would encourage him to? I'm not going to say [7:54] on either one of those. He's looking to how to end that conflict and how to lower prices for Americans [8:00] every day. Well, the date just stood out, you know, weeks before the midterms doing something that could [8:04] arguably push prices back up. And so if it's a national security decision versus a political one, [8:12] I'd be interested to know your point of view. If his decisions were political, he would have just kicked the can [8:17] down the road and delivered a nuclear armed Iran to the next president. You've got to respect that. [8:22] That's an incredible move to lean in and say, I'm not going to let them become nuclear armed. [8:27] He knew it was going to elevate energy prices in the short run. He said, I'm going to take a hit there, [8:32] but I've got to do the right thing. You did tell him that, that there would be a huge energy price spike [8:36] when he made this decision? He was well aware of the risk to energy flows that were coming out of the Persian [8:42] Gulf region. He said, I simply cannot, the world cannot sustain a nuclear armed Iran. And I'm [8:47] not going to do it. Secretary Wright, thank you for your time today. [8:50] Thank you, Margaret.