Oil, fuel supply buffers are thinning as Middle East conflict continues, Chevron CEO says
CVX•Chevron CEO Mike Wirth said oil and fuel supply buffers are thinning as the Middle East conflict continues. He said physical oil in Asia is closer to $150 per barrel than the roughly $100 price of Brent futures, while the G7 agreed to release 100 million barrels from crude and diesel reserves.
1. Tighter energy markets
The energy system is more fragile than earlier in the U.S.-Israeli war, and the oil price floor is gradually rising, Chevron CEO Mike Wirth said at the Energy Intelligence Forum in London. With the conflict in its eighth month, he said oil and gas market fundamentals are tightening.
2. Fuel supply pressures
Wirth said the landed price of physical oil in Asia is closer to $150 per barrel than the roughly $100 price of Brent futures. Tightness in refined products has also driven gasoline and diesel prices much higher than the crude used to make them.
3. Export ban warning
The G7 agreed last week to release 100 million barrels of crude and diesel from strategic reserves as governments consider ways to shield consumers and industry from higher fuel costs. Wirth said an export ban would constrain supplies when the world needs them, and a diesel ban might not help U.S. consumers.
