Oklahoma’s “go-to” oil guy, Harold Hamm, founder and chair of Continental Resources Company believes the world’s high oil prices will eventually decline as the U.S. and Israeli war against Iran eventually ends.
“ I think oil will come back down. Oil prices will moderate again. And we should expect that,” said Hamm in an interview Thursday on the Fox News program, “Mornings with Maria Bartiromo”.
Until then, Hamm admits some of the world’s oil prices are shocking such as the price paid this week in Singapore for diesel fuel.
“When you look around the world, just yesterday, fiscal barrel of diesel was $100 premium over the paper cost. So we’re talking $200 a barrel for diesel yesterday in Singapore. So that’s what’s going on,” said Hamm, referring to the minimum oil price per barrel required for an oil-exporting country to balance its national budget.
As West Texas Intermediate oil prices in the U.S. reached nearly $111 a barrel Wednesday morning, Hamm felt confident.
“$100 oil is not going to wreck our economy. We’re energy independent here in America. We certainly are. And thank goodness for the energy and renaissance that we’ve created. But $200 oil can certainly be a shock to the world economy. So that’s what we have to protect against,” said Hamm.
Referencing President Trump’s Tuesday night address to the nation about his goals for the war, the billionaire oilman supported the President and said it’s clear the Strait of Hormuz must be opened to crude oil tankers.
“Huge risk. Every one of us have known that for a very long time and now it’s come home to roost for sure. But, you know, I heard the president and it was good for him to remind Americans where we are.”
Hamm says what Iran is doing by holding the world oil market hostage through its missile attacks on ships attempting to pass through the Strait is no surprise.
“And so it shouldn’t surprise anybody. This has been the home of terrorist activity, terrorism for 47 years. They’ve killed hundreds of thousands of Americans. What more should we expect of these guys? So yeah, it’s certainly a bad situation there. But this is international waters. They have no legal claim to this at all. They’re trying to take advantage of a situation that’s just geographical. We can’t allow them to do it,” he declared, adding that action must be taken and the U.S. shouldn’t do it alone.
“The president’s right. I mean, this is for NATO. My goodness, Europe’s the one hurting for oil. I mean, NATO, we can’t carry NATO forever. He’s exactly correct about that. So they have to step up and do their part and they need to hear for sure.”
Hamm, considered a long-time ally of President Trump, also had some critical words for economists who talk of $40 and $50 oil prices, which he says is not a sustainable world price. The oil leader said the average cost of supply is much higher and the world will have to return to at $70 range “if we’re going to have oil supply that’s going to meet the world’s needs.”
He called it “vital” because the world is using 108 million barrels of oil a day.
“You shouldn’t expect it. And I think we’re doing a disservice when we talk about it. We talk about $40 oil, $50 oil. It’s below the average cost of supply. And it just doesn’t work. That’s not the way economics work.”
The Continental leader explained how the Chinese acquired huge amounts of the world’s oil when prices were $60.
“–they were buying, building a supply of right now 1.2 billion barrels, going to 2 billion barrels,” added Hamm, saying the U.S. should have been doing the same thing, even though it is energy independent from other non-oil producing nationsl.
“We encouraged refilling our SPR when it was cheap, and we kind of missed an opportunity there. But the president was for it. Congress has to work and make that happen. But after Biden drained it for political reasons, we need it refilled for America’s interest.”
Shortly after Hamm’s interview, Politico reported that White House officials are bracing for oil prices to surge past the $150-a-barrel mark as the Iran war stretches into its second month and the Strait of Hormuz remains largely closed, according to a new report.
In recent weeks, the average cost of a barrel of crude has hovered around $100, a figure that the Trump administration now sees as the new “baseline,” though a potential spike to $200 hasn’t been ruled out, a source familiar with the matter told Politico. Former Trump economic adviser Stephen Moore said things would seriously need to go wrong for crude to go past $150-a-barrel, which he described as a “nightmare scenario.”