Mike Wirth pointed to risks around the Strait of Hormuz and Red Sea as disrupted transit routes and lower inventories add strain to global energy supplies.
Chevron chair and CEO Mike Wirth said the Iran war has left global energy markets "somewhat fragile and uncertain," citing threats to key oil transit routes including the Strait of Hormuz and the Red Sea. In an interview on Fox News’s "Sunday Morning Futures," Wirth said demand remains "pretty strong" but inventories have been drawn down worldwide, spanning both strategic stocks and commercial stocks. He added that energy assets have been targeted in the conflict, weakening the system’s ability to meet global demand and leaving the pace of any market rebalancing dependent on how quickly damaged capacity returns. Wirth said the industry has "done well" and credited the U.S. with having "stepped up to be part of the answer here" on oil production. Looking further out, he said the market could see structural changes, pointing to discussions about developing a pipeline to the Mediterranean Sea. The route is being considered as a response to Iran’s closure of the Strait of Hormuz, where roughly 20 percent of the world’s oil comes from, and the Houthi blockade on the Red Sea, which has kept around 5 percent of the world’s oil stranded. Oil producers have also examined moving crude across Saudi Arabia to bypass the Red Sea disruption, with a route from Yanbu, Saudi Arabia, through the Suez Canal in Egypt to the Mediterranean, then around Africa past the Cape of Good Hope and on to Asia. Homayoun Falakshahi, head of crude oil analysis at Kpler, told Al Jazeera last month the main constraint is whether enough oil can move through the canal quickly enough to satisfy global demand. The supply shock has pushed U.S. gasoline prices sharply higher since the war began on Feb. 28. The national average reached $4.10 on Sunday, according to AAA, more than $1 above the level at the start of the war. The Trump administration is also looking at restarting shuttered refining capacity, including the St. Croix refinery, which was built to refine Venezuelan oil. A White House official confirmed that effort to The Hill last week, while three industry executives told Politico the White House has discussed reopening refineries from the Virgin Islands to California. The St. Croix refinery has been shut indefinitely since 2021 after the Environmental Protection Agency (U.S. environmental regulator) ordered a 60-day shutdown, saying its oil releases and air pollution posed an "imminent risk to public health."