Chevron CEO Warns Oil Market Buffers Exhausted, Fueling Price Spikes

Chevron's CEO Mike Wirth warned that oil market buffers are exhausted, increasing the risk of price spikes due to ongoing supply shocks from geopolitical conflicts. The buffers were depleted after countries released some crude stockpiles in late February and the US eased restrictions on oil stored on tankers at sea from sanctioned countries.

The average U.S. diesel price has hit $6 per gallon for the first time, while Brent crude futures have surged 8% this week. Wirth stated that it is difficult to see a scenario where prices soften quickly, and risks remain tilted to the upside over the next few months.

Chevron plans to fund its $7 billion Venezuela expansion from cash flows of existing joint ventures, aiming to more than double output to 600,000 barrels per day by 2031. The company's operations in the Black Sea region have seen fewer effects on its operations after Ukraine spoke with US President Donald Trump about attacks on Russian oil infrastructure.