Chevron CEO says depleted crude oil buffers could lead to higher prices

Chevron CEO Mike Wirth said on Friday that oil buffers that limited crude price increases earlier in the Iran war have been depleted, and the conflict could lift prices further over the next few months.

Since the war began in late February, countries have released some crude stockpiles to the market, and the U.S. also lifted restrictions on oil stored on ships floating at sea from countries under sanctions. Those buffers have now been "played out," Wirth said while speaking at a University of Texas at Austin energy conference.

"It's harder to envision a scenario where prices soften and quickly," he said. "I think the risks remain to the upside over the next few months."

The average price of diesel in the U.S. hit $6 per gallon for the first time on Thursday, as the Iran war, combined with Ukrainian attacks on Russian refineries, squeezed supply. Brent crude futures remain on track for a weekly gain of 8%.

Wirth said the administration of U.S. President Donald Trump had spoken with Ukraine about its attacks on oil infrastructure in Russia's Black Sea, and that the company since then has seen fewer impacts on its operations in the region.

Chevron operates the massive Tengiz oilfield in Kazakhstan, and also holds a stake in the Caspian Pipeline Consortium, which operates an export pipeline from Tengiz to the Black Sea.

Wirth added the company will fund its planned $7 billion investment to expand in Venezuela entirely with cash generated by its three existing joint ventures in the country. Last week, Chevron signed new contract terms with the Venezuelan government to expand to two new oil areas and more than double output to about 600,000 barrels per day by 2031.

"We'll live entirely within the means of those ventures' ability to generate cash, not bring in cash from the outside," Wirth said.