Chevron CEO Says Energy Markets Should Be More Worried

Energy markets are not adequately pricing in the oil supply shock caused by the war in Iran, Chevron CEO Mike Wirth said at S&P Global’s annual CERAWeek conference in Houston.

Wirth said traders are "uncertain," "unpredictable" and "volatile." (Photo: Chevron)

Based on the amount of supply that has been taken offline through the Strait of Hormuz, on top of oil infrastructure damage, crude futures should be higher, according to Wirth, Patti Domm and Alex Kozul-Wright reported for Barron’s Daily.

The futures curve for West Texas Intermediate shows expected crude prices at about $82 per barrel in July, falling to $73 by December.

The market has priced oil to remain in the $70s for most of 2027.

Before the conflict, those futures were in the $50–$60 range. But with only a limited understanding of the war’s timeline or course, futures traders are making moves based on “any kind of perception,” Wirth said.

“They are uncertain. They are unpredictable. They are volatile.”

In the physical market, however, oil shortages are already emerging. There is tightness of supply in the diesel and jet fuel markets, Wirth noted, and Asia is starting to face “real concerns” about energy supply.

According to S&P Global Energy, between about 6.5 million and 7 million barrels of oil are currently offline in the Middle East, a figure expected to rise to between 8 million and 9 million barrels within several days.

Some 80% of the oil that normally flows through the Strait of Hormuz goes to Asia.