Diesel is at a record $6.26 and the Saudi East-West pipeline is shut after an attack, but the outage will be "measured in days," Chris Wright said.
The market has been reading the closure as a crude supply problem. Wright's argument is that crude is not the binding constraint — refining capacity is, and two of the closures behind that are in California rather than in a war zone.
"Refining is the bigger challenge. You are right, it's even bigger than the crude supply challenge right now."
Wright runs the Department of Energy and was speaking from the G20 energy meeting in Houston, minutes after announcing another Japanese investment and manufacturing deal.
The full segment is covered here so you can skip it.
Here are the 4 takeaways that matter.
👤 Guest: Chris Wright, US Secretary of Energy
🎙️ Hosts: Morgan Brennan, reporting for CNBC from the G20 energy meeting in Houston, and Carl Quintanilla, who anchors Squawk on the Street
🧩 Other segments: Max Kettner, Chief Multi-Asset Strategist at HSBC; Stephen Miran, former Federal Reserve Governor and now a strategist at Hudson Bay Capital; and Senator Mark Warner of Virginia on AI regulation
📰 Published: 15 September 2026 on the Squawk on the Street feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 4 min
Key Takeaways
The East-West pipeline outage will be measured in days, not weeks
He calls the attacks Iran-supported and the interruption brief and temporary
The barrels that cannot use the pipeline are being routed to the Strait of Hormuz with the US military
Most Red Sea cargoes now go via the Suez Canal and the pipeline beside it, which is longer but works
Refining, not crude supply, is the tighter constraint right now
Capacity is offline in the Middle East and in Russia, and two California refineries closed in the last 12 months
He answered Gavin Newsom's post by name and blamed the California closures on him
His claim: 60% of California's oil is imported from overseas
1. Measured in Days
Quintanilla opened the segment on oil rising again and diesel at a record $6.26. Morgan Brennan, at the G20 energy meeting in Houston, noted Wright had just come off stage announcing another deal with Japan for investment and manufacturing in the United States, with deals involving Venezuelan representatives also expected at the summit, then asked about the East-West pipeline closure and reports that the Saudis are canceling cargoes to European refiners.
Wright named the source of the attacks first. "Oh, well, look, these are Iran-supported attacks from proxy groups that are doing this."
His expectation for the operators was immediate. "But the Saudis are ingenious, and I think you will see the pipeline running again very soon. This will be a brief and temporary interruption."
Asked to put a number on "very soon," he gave one. "It's still a detailed assessment, but I think it will be measured in days."
The oil that cannot use the pipeline is not stranded. "And, of course, they're also taking quick action to have more of that oil, these few days that isn't going through the East-West pipeline, to go out to the Strait of Hormuz with the United States military."
2. Around the Bab-el-Mandeb
Brennan raised the Red Sea, where Houthi activity has increased, along with strikes against the Saudis and the seizure of more islands, and asked whether the cargoes can actually reach their destinations once the pipeline restarts.
Wright said they can, and identified the choke point. "Look, the Bab-el-Mandeb is an increasing problem — again, an Iran-backed proxy group."
His characterization of the intent. "They're trying to bring economic terrorism to the world."
The route is already moving. "Most of those cargoes now actually go through the Suez Canal and the pipeline through Egypt that sits next to the canal."
He conceded the cost without conceding the outcome. "So it's a longer route. It's not ideal, but energy gets to market."
3. Refining Is the Constraint
Brennan put the diesel record to him directly: it is not only a crude supply crunch but refining capacity coming offline in the Middle East and in Russia, where export bans continue. How acute is the damage, and how quickly can capacity return?
Wright agreed and went further than the question. "Refining is the bigger challenge. You are right, it's even bigger than the crude supply challenge right now."
Two conflicts have taken capacity out. Refining has come off in the Middle East and "We've had a fair amount of refining come off in Russia," which had been a big exporter of diesel.
He then added two closures that have nothing to do with either war. He put "self-inflicted wounds" to Gavin Newsom's leadership behind a decision that "closed two major refineries in California" in the last 12 months.
His statement of the requirement is a single sentence. "We don't need shrinking refining capacity. We need growing refining capacity."
And the policy framing he attached to it. "President Trump has been all in about expanding our energy production capacity, expanding our energy security, and driving prices down and making us more secure." The purpose, in his words: "So when we get a crisis like the threat of a nuclear armed Iran, we have the resources to navigate through that crisis."
4. Answering Newsom
Brennan read Wright the California governor's post on X: "Everyone knew Trump's Iran war would disrupt the Strait of Hormuz, skyrocket costs. So why did Energy Secretary do nothing to protect us? Americans are owed answers about what the Trump administration knew and why they failed to shield us from these predictable consequences." She noted the midterm election is approaching and asked how he answers critics including the governor.
Wright rejected it outright. "Well, completely false, as almost everything Gavin Newsom says about energy."
His counterclaim is about actions already taken. "In fact, if we hadn't have done the temporary Jones Act waivers, if we hadn't have taken a few other actions, there would be gas lines in California and trucks wouldn't be moving."
He then listed his charges against the governor's record. "This is a Governor who's driven the highest electricity prices in the nation, the highest gasoline prices in the nation, the highest diesel prices in the nation, and the highest adjusted poverty rate in the nation, which has led to a mass exodus of business and people."
And closed on an import figure. "60% of California's oil is imported from overseas," he said, with Iraq a major supplier — in a country that is a net oil exporter.
Bonus Insights
Wright was on stage minutes earlier announcing another deal with Japan for investment and manufacturing in the United States, and Brennan said representatives from Venezuela were also on site at the summit with deals expected.
Brennan's framing of the diesel move was that it is not only a crude crunch: refining capacity has come offline in the Middle East and in Russia, where export bans continue. Wright agreed with the framing before extending it to California.
The reports Brennan put to him included the Saudis canceling some cargoes to European refiners, which he did not dispute.
Wright's bottom line is that the crude disruption is a days-long problem with a workaround, and the durable one is refining capacity, where he counts the two California closures alongside the war damage in Russia and the Middle East.
Products, Companies & Tools Mentioned
The Saudi East-West pipeline (Shut by what Wright called Iran-supported proxy attacks; he expects it back within days, with the diverted barrels going out through the Strait of Hormuz under US military escort)
The Jones Act (Temporary waivers he credits with preventing gas lines in California and keeping trucks moving)
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