Spiking Oil Prices Don’t Make Bessent a Hedge Fund Manager (Again)

In the shadow of the Iran war, with crude hovering around $100 a barrel, the allure of finding a quick fix to energy inflation is understandable. But intervening directly in the financial markets by taking a bearish short position in oil — which the US Treasury says it’s been discussing — would be a terrible idea. Economics and history both scream the same message: The US shouldn’t do it.

Selling oil futures would be a desperate ploy, born of panic about rising US gasoline and diesel retail prices ahead of the midterm elections. History is littered with American politicians who thought they knew better than the market. Remember the 1970s when President Richard Nixon imposed energy price controls after the first oil crisis? It didn’t lower prices, but it brought shortages and mile-long lines at gas stations.