Critics predicted oil market ‘chaos’ after we ditched Iran deal — and they were wrong, Pompeo says

U.S. Secretary of State Mike Pompeo said Saturday the U.S. has put in the work to make sure global oil markets are stable and have enough supply — and he’s “convinced” that will continue.

In fact, Pompeo pointed to “simple math” that shows there’s been no disruption to the overall global supply of crude since the U.S. withdrew from the Iran nuclear deal, officially called the Joint Comprehensive Plan of Action — something that some analysts had warned could happen.

“About a year ago, President Trump withdrew the JCPOA, you’ll recall. I’ll bet on your television station folks were talking about how oil prices would rise, they’d spike, it would be chaos in the crude oil markets,” the secretary of state told CNBC’s Hadley Gamble.

“In fact,” he added, “crude oil prices today are lower than they were the day that we withdrew from the JCPOA. Lower. Not higher, not radically higher, not crazy higher, not chaos — but lower.”

Pompeo is correct that oil is lower now than it was on the day the U.S. withdrew from the Iran deal.

International standard Brent crude closed at $ 74.16 on May 8, 2018, compared with $ 70.62 last Friday. West Texas Intermediate stood at $ 69.06 last year then, but it ended at $ 61.66 in the latest session.

Some observers predicted on CNBC and elsewhere that the U.S. withdrawal from the Iran agreement would make crude prices spike, though others who spoke to CNBC at the time predicted the opposite.

U.S. Secretary of State Mike Pompeo on May 8, 2019.

Tolga Akmen | AFP | Getty Images

The United States withdrew from the deal about a year ago — effectively ending its viability. Iran is a major oil producer, and the JCPOA had cleared the way for Iranian oil exports to Europe and elsewhere.

Pompeo, for his part, attributed that global price stability to the work done by American diplomats and oil producers.

“We’ve done the good diplomatic work to ensure that our oil markets are adequately supplied. We’ve worked with our partners,” he said. “American economic excellence, freedom, deregulation has created enormous capacity for crude oil production in the United States itself.”

He further predicted those forces will keep prices around the same level: “That combination of good work around the world and work inside the United States has continued to make sure that crude oil markets are adequately supplied, and I’m convinced that they will continue to be.”

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