ConocoPhillips Chairman Sees $70 Oil Price Floor Amid Supply Challenges

ConocoPhillips Chairman Ryan Lance has stated that the floor for oil prices is now around $70 per barrel, a significant shift from earlier bearish forecasts. Before the Iran war, predictions for 2026 had suggested Brent crude could drop to $50 per barrel. However, Lance believes oil prices may not fall that low again, if ever. Speaking at a forum in London, he noted that the mid-cycle price for West Texas Intermediate (WTI) crude oil could range between $65 and $70 per barrel.

The global oil supply chain has been disrupted, and Lance expects it could take until 2028 or 2029 for demand to fully rebound. He emphasized the challenge of meeting growing demand with conventional oil production. ConocoPhillips is currently focusing more on upstream exploration, finding and producing oil, rather than midstream investments, which involve transporting and storing oil.

The Iran war has left the global oil system vulnerable, with the U.S. Strategic Petroleum Reserve (SPR) near historic lows. Saudi Aramco's CEO, Amin Nasser, also noted that rebuilding global oil inventories could take up to two years. The conflict has highlighted the strategic importance of the Strait of Hormuz, leading some experts to suggest diversifying oil routes and increasing domestic renewable energy production.

Higher oil prices are beneficial for major oil companies like ConocoPhillips and ExxonMobil, which have reported significant year-over-year earnings growth. Elevated profits allow these companies to strengthen their balance sheets and return capital to shareholders, making their stocks more attractive. However, investors should monitor geopolitical shifts that could impact long-term oil prices.