Shale Bosses Say Trump Posts on Iran Sow Energy Market Chaos

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(Bloomberg) — US oil shale executives say the White House’s erratic communications about the war in Iran are sowing confusion in energy markets and making planning for future months near impossible.

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In a series of anonymous comments published Wednesday from a survey released by the Federal Reserve Bank of Dallas, industry executives cited concerns about inconsistent policy announcements from the Trump administration about the conflict in the Middle East.

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“Golly. What could possibly be affecting our business other than a Covid-sized supply gap driven by a war being commandeered by an administration that just cannot tell the truth?” one respondent was quoted as saying. “They jawbone the price down basically every Sunday evening. If they know an Hormuz reopening isn’t likely, it’ll make the medium-term supply issue 10 times worse.”

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Another respondent said “markets can price risk, but they can’t price a tweet,” adding that “the whiplash from diplomacy-by-social-media has become the single most unpredictable input in our planning.”

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The sharp criticism comes despite President Donald Trump’s strong relationship with the oil industry, which has seen many of its domestic policy priorities advanced during his second term.

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“Since day one, President Trump has been rolling back burdensome Biden regulations to unleash American energy,” said Taylor Rogers, a White House spokeswoman. “As President Trump has said, these short-term, temporary disruptions to energy markets will end once the Iran situation is resolved and traffic in the Strait continues to normalize.”

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The Dallas bank, which typically conducts a quarterly questionnaire of energy companies in Texas, northern Louisiana and southern New Mexico, compiled its latest survey from June 9-17 as the US and Iran negotiated a memorandum of understanding about ending hostilities. The MOU was signed on June 17.

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“The prospect that Iran will comply and conform with any agreement, written or oral, is, at best, wishing on a fantasy,”one of the survey respondents said.

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West Texas Intermediate dipped below $70 a barrel on Wednesday for the first time since March 4, just days after the US and Israel launched their war on Iran. Oil fell as more tankers cross the Strait of Hormuz and signs of progress in US-Iran peace talks eased fears of an immediate supply crunch.

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Before the decline in price, one of the respondents said “the White House seems to prefer commotion and chaos to delivering meaningful, truthful information that serious business decisions can be made on.”

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On average, respondents to the bank’s survey expect the price of WTI to be $81 per barrel at the end of the year. Predictions range from $60, lower than it was before the war started, to $150. The US oil benchmark touched a high of about $119 in early March.