Chevron CEO Mike Wirth signals that the global energy market lacks the flexibility to absorb further supply shocks, warning that oil prices face significant upside risks as strategic reserves and commercial inventories dwindle.
Brent crude is trading near $105 and the CEO sees upside risks due to exhausted supply buffers.
WTI crude is above $100 and the CEO expects prices to rise further as supply cushions are used up.
Chevron's CEO stated that oil price risks remain to the upside, which would boost Chevron's upstream revenue and free cash flow.
Chevron CEO Mike Wirth warns that global oil markets have exhausted the strategic buffers used to mitigate supply shocks since the Iran conflict began. With Brent crude near $105 and WTI above $100, Wirth suggests that prices are more likely to rise than fall, contradicting administration hopes for a near-term decline.
Wirth argues that the mechanisms used to absorb supply shocks earlier in the conflict, such as strategic reserve releases and increased vessel storage, have been depleted, leaving the market vulnerable to further disruptions.