Chevron CEO Warns of Thinning Energy Buffers Amid Middle East Conflict

Chevron CEO Mike Wirth warned that the global energy system is becoming increasingly fragile as the Middle East conflict persists. Speaking at the Energy Intelligence Forum in London, Wirth noted that the oil and fuel supply buffers are thinning, pushing the oil price floor higher. The conflict, now in its eighth month, has tightened the fundamentals of the oil and gas market, according to Wirth.

The landed price of physical oil in Asia is nearing $150 per barrel, significantly higher than the $100 per barrel trading price for Brent oil futures. Beyond crude oil, the world has also seen a tightening of refined products markets, driving up prices for fuels like gasoline and diesel beyond their underlying crude costs. Governments are exploring measures to protect consumers and industries from rising fuel costs, including a recent G7 agreement to release 100 million barrels of crude and diesel from strategic reserves.

Wirth cautioned against restricting supply, such as a potential US ban on exports, arguing that it would constrain supplies at a critical time. He also suggested that a diesel ban might not help US consumers, particularly with midterm elections approaching.