ConocoPhillips Chairman Sets New Oil Price Floor at $70

ConocoPhillips Chairman Ryan Lance has declared that the floor for oil prices is now $70 per barrel, a significant shift from earlier bearish forecasts. Before the Iran conflict, analysts like the U.S. Energy Information Administration (EIA) predicted Brent crude would drop to $50 by early 2026. Lance, speaking at a London forum, expects the mid-cycle price for West Texas Intermediate (WTI) crude to hover around $65-$70 per barrel.

Lance emphasized that rebuilding global oil supply could take until 2028 or 2029, with the Iran war straining but not breaking the system. He highlighted concerns over future oil production, noting ConocoPhillips' focus on upstream exploration rather than midstream investments. Meanwhile, Saudi Aramco's CEO Amin Nasser estimated it would take two years to replenish lost oil inventories, which dropped by roughly 3 billion barrels due to the conflict.

The outlook is favorable for major oil companies, as higher prices translate to elevated profits and stronger cash flow. ConocoPhillips reported a 128% year-over-year increase in adjusted earnings per share, while ExxonMobil saw similar gains. These companies are using the excess cash to reduce debt and return capital to shareholders, making their stocks more attractive.

However, investors should monitor geopolitical risks, particularly Iran's control over the Strait of Hormuz. Experts suggest the U.S. may prioritize domestic energy production and renewable routes for national security, potentially impacting long-term oil prices. Despite this, global demand for power, driven by factors like artificial intelligence, may sustain oil's role alongside renewables.