Chevron CEO: US-Iran Conflict Hit Global Oil Markets Harder Than Russia-Ukraine War
Mike Wirth said it will take some time to rebuild inventories and supply chains after the Strait of Hormuz fully opens.
US-Iran war damaged global oil markets more than Russia-Ukraine war, Chevron CEO says
Chevron CEO Mike Wirth warned that the recent conflict between the United States and Iran inflicted deeper and more lasting damage on global oil markets than the Russia-Ukraine war, citing the prolonged closure of the Strait of Hormuz as the primary factor. Speaking at a major energy conference, Wirth emphasized that the narrow waterway, through which roughly 20 percent of the world's oil supply passes daily, became a chokepoint that sent shockwaves through global energy infrastructure. The disruption led to record price spikes and widespread supply shortages that affected economies around the world.
Wirth explained that while the Russia-Ukraine conflict primarily disrupted natural gas flows to Europe and rerouted crude oil trade patterns, the physical blockage of the Strait of Hormuz effectively removed millions of barrels per day from the global market simultaneously. The sudden loss of supply from major Gulf producers including Saudi Arabia, the UAE, Kuwait, and Iraq created a crisis that no amount of strategic reserve releases or alternative sourcing could fully offset. He noted that the scale of the disruption was unprecedented in modern energy history.
Looking ahead, the Chevron chief said it will take considerable time to rebuild inventories and supply chains even after the Strait of Hormuz fully reopens to commercial traffic. Storage facilities around the world were drawn down to critically low levels during the crisis, and restoring them to healthy operating ranges will require sustained production increases over many months. Additionally, shipping routes, insurance markets, and refinery operations that were disrupted will need time to normalize.
Wirth called on governments and industry leaders to invest more aggressively in energy security measures, including diversified supply routes, expanded storage capacity, and continued development of domestic energy resources. He stressed that the crisis underscored the fragility of global oil markets and their dependence on a small number of critical transit points. While expressing cautious optimism about the recovery, Wirth acknowledged that the geopolitical landscape remains uncertain and that the energy industry must be better prepared for future disruptions of this magnitude.