Leading executives of American oil companies are warning that the long-term blockade of the Strait of Hormuz and the escalation of conflicts in the Middle East have finally pushed the world into a serious fuel crisis.
As the Wall Street Journal (WSJ) reports, commercial supplies around the world have been falling for more than six months, while the Strategic Petroleum Reserve is dwindling. Attacks over the past week have disabled a key Saudi pipeline that runs from the Abqaiq field to the Red Sea port of Yanbu, a route that is supposed to bypass the Strait of Hormuz, cutting at least 2,5 million barrels of oil per day from an already tight market.
The market situation is extremely tense. The price of US crude oil has jumped 19 percent in just three weeks, reaching $101 a barrel, while the price of diesel has broken a record of $6,23 a gallon and gasoline has returned to $4,32.
Chevron CEO Mike Wirth told an energy conference in Austin that the mechanisms that mitigated price and supply risks are now largely exhausted and he sees no way prices will quickly return to their previous levels. Energy consultants warn that without a resolution to the conflict with Iran, the situation threatens to spiral out of control.
On the other hand, the administration of Donald Trump is trying to calm the public. US Secretary of the Interior, Doug Burgum, told reporters that the media must use the word "temporary", emphasizing that the White House has mechanisms to relieve pressure. The administration has focused on reaching an agreement to increase production in Venezuela and expand the capacity of US refineries, while Burgum at the same time rejected speculation about a temporary ban on the export of US derivatives, calling such a move ineffective.
Despite occasional talks, relations between Washington and oil company executives have been strained. Wirth confirmed that he has not received any response from Trump since early August, when the president criticized him on the Truth Social platform for high retail prices.
Adding pressure on the global market is China. As the world's largest oil importer, China has for months relied on its own reserves for nearly half of its daily consumption, providing relief to the market, but has recently resumed bulk purchases from international suppliers.
At the same time, the upcoming harvest season will dramatically increase farmers' demand for diesel, while refinery capacities are still reduced due to conflicts in the Middle East and Russia. Because of all this, investors and analysts say that a solution is not in sight and that the energy crisis will last much longer than political representatives estimate.
