Chevron CEO Mike Wirth warned that the buffers that helped cushion the economic shock of the Iran war have been exhausted. Speaking to CNBC’s Squawk Box Europe on October 7, Wirth said the world entered 2026 with high oil inventories, but those reserves have been steadily depleted since the conflict began in late February. Governments and companies have drawn down stocks, and sanctions waivers have allowed additional barrels to reach buyers, but these measures are only temporary fixes.
The situation is particularly dire for diesel, a critical fuel for transportation and agriculture. The U.S. average price hit a record $6.53 per gallon on September 22, up from $3.76 before the war. The International Energy Agency expects the diesel market to remain tight into 2027, with supply relying heavily on a recovery in Middle Eastern production. Global oil supply is forecast to drop by 5.8 million barrels per day this year, with high prices cutting demand by 2.6 million barrels daily in 2026.
President Donald Trump has attempted to address rising fuel costs ahead of the November 3 midterms, but his efforts have faced criticism. A proposed ban on U.S. diesel exports was shelved after the Group of Seven agreed to release 100 million barrels from emergency reserves. Trump also signed an executive order allowing the use of red-dyed diesel on public roads, though analysts remain skeptical of its impact. His latest move involved a deal with Russian President Vladimir Putin to supply more diesel, but the agreement has drawn bipartisan backlash and may not significantly ease the shortage.
Wirth emphasized that stockpile releases and other stopgap measures cannot replace the oil and fuel not flowing from key producing regions. With buffers already depleted, the global market remains vulnerable to further disruptions.