Exxon Mobil CEO Darren Woods cautioned that crude oil prices might climb even further, and the market risks a shortage of petroleum products. Increased domestic production within the US will be insufficient to compensate for the blocked resource supplies, reports the WSJ.
US oil industry giants alerted the administration of American President Donald Trump regarding a potential deterioration in the energy market situation. This information comes from The Wall Street Journal, citing its sources.
A meeting between officials and business leaders took place at the White House this week, though Trump was not present. Executives from Exxon Mobil, Chevron, and ConocoPhillips warned that disruptions to shipping in the Strait of Hormuz will continue to fuel volatility in the energy market.
Goldman Sachs factored in a possibility of Brent crude prices surpassing their 2008 peaks.
Exxon Mobil CEO Darren Woods stated that oil prices could ascend beyond their current record levels if speculators unexpectedly drive them up amidst dwindling supplies. In addition to supply interruptions, the market could face a severe deficit of refined oil products. For instance, an analytical report from Roseland Oil & Gas Inc suggests that the current increases in oil extraction volumes “absolutely cannot make up for the shortage.”
As the WSJ observes, the boost in US production will be constrained and will not be enough to cover the 10 million barrels per day of oil currently held up due to the Strait of Hormuz situation. Twenty percent of global oil shipments transit through this waterway.
Early in March, the US administration considered several avenues for price stabilization: easing sanctions targeting Russian oil and the largest-ever release from the Strategic Petroleum Reserve (SPR). Mid-month, Energy Secretary Chris Wright emphasized that removing restrictions on Russian oil is unlikely. “I would say this is improbable, but our focus is on the military operation and resolving the issue,” he clarified.
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