Chevron and ExxonMobil Warn of Critical Oil Supply Risks in Middle East Crisis
As the war in Iran continues, executives with Chevron and ExxonMobil are sounding alarms about impending shortages and price hikes if a deal is not reached soon.
Per a report from The National News Desk, Chevron has experienced attacks on its vessels in the Strait of Hormuz, as detailed in multiple unpublicized reports. Chevron CEO Mike Wirth said it could take months to clear out the ships left stuck in the strait, with mines in the water also being a concern.
The more time that passes without a deal being reached, the worse the impact will ultimately be. This sentiment was underscored by a recent statement from Exxon Mobil senior vice president Neil Chapman:
“We’re approaching unheard-of inventory levels. I mean really, really low levels,” said Chapman. “You can debate whether that’s going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you’ll see price shoot up.”
GasBuddy lead petroleum analyst Patrick De Haan concurred, telling The National News Desk that an agreement needs to be reached within as soon as a few days before we see a reaction.
“If there’s not a definitive deal, probably by early next week, I think oil markets could swing the other way rather wildly,” said De Haan.
No End in Sight Yet
Crude oil and gasoline prices recently started to drop, in hopes of Iran and the U.S. making a deal, or at least extending a ceasefire—however, recent days have shown little sign of that happening. Reuters shared that this past Monday, Iranian media shared that Tehran has stopped indirect negotiations with Washington.
Conversely, on Monday U.S. President Donald Trump said in an interview with CNBC that he would not mind if discussions ended with Iran. After the interview, Trump then posted on social media that talks were ongoing, and that he’s expecting an agreement to extend the ceasefire and reopen the strait throughout the next week.
As shared in a preliminary Reuters poll Monday, U.S. crude stockpiles have roughly fallen by an estimated 3.6 million barrels in the week ended May 29. It’s likely that distillates and gasoline inventories have also declined.