Oil Market Risks Higher Prices as Buffers Dry Up

Chevron's CEO Mike Wirth warned that the oil market is running out of buffers to absorb price shocks, stating that the 'cushions' that kept prices from exploding earlier in the Iran war are finished.

The buffers included commercial inventories above normal levels at the start of 2026, government reserve releases, and barrels parked on the water under sanctions until Washington relaxed restrictions.

With these cushions gone, Wirth said it's harder to envision a scenario where prices soften quickly, and the risks remain to the upside over the next few months.