Chevron CEO Warns Oil Prices May Rise as Shock Absorbers are Exhausted

Chevron's CEO Mike Wirth has contradicted President Donald Trump's claims that oil prices will fall after the November midterm elections. According to Wirth, the shock absorbers that helped contain crude prices after the U.S.-Iran war began in late February have largely been exhausted.

The loss of spare capacity became more acute after Yemen's Houthi forces struck Saudi Arabia's East-West crude pipeline, leaving an estimated 2.5 million barrels per day of supply in limbo. Wirth noted that commercial inventories have been tapped and Washington has already relaxed restrictions on sanctioned crude held on vessels at sea.

Wirth's comments stand in sharp contrast to the administration's public messaging, which has downplayed the impact of the conflict on oil prices. Trump said in a television interview that oil prices would fall 'right after the election,' while Interior Secretary Doug Burgum described the latest supply disruption as 'temporary.'

The situation is 'far more complex than it was six months ago,' Wirth warned, with Brent crude trading near $105 a barrel and West Texas Intermediate just above $100. The loss of spare capacity could lead to higher oil prices in the coming months, Wirth said.