Oil companies are warning of a fuel shortage due to the war with Iran
Executives from the largest oil and gas companies told the CERAWeek energy conference in Houston that the market is underestimating the scale of energy supply disruptions caused by the war with Iran, according to CNBC.
They said that Asia and Europe could face fuel shortages if the conflict drags on. At the same time, oil prices may remain high even after the war ends, as countries rebuild their stocks.
ConocoPhillips CEO Ryan Lance stated that it is impossible to remove 8–10 million barrels of oil per day and a significant portion of the liquefied natural gas market from the global market without serious consequences.
Sheikh Nawaf al-Sabah, CEO of Kuwait Petroleum Corporation, said that Iran had effectively imposed an economic blockade by closing the Strait of Hormuz, through which a significant portion of the world’s energy supplies passes. He stated that this affects not only the Gulf states but also the global economy and supply chains.
Analyst Paul Senki described the current situation as the most serious since the 1973 oil embargo and noted that the Strait of Hormuz had not previously been closed.
According to a Pentagon spokesperson, the number of Iranian attacks has decreased, but oil and gas infrastructure remains under threat. The CEO of ConocoPhillips stated that the company had approached the Donald Trump administration with a request to provide military protection for facilities in Qatar.
Due to Iran’s attacks, operations at the world’s largest liquefied natural gas hub in Qatar have been suspended. ConocoPhillips has reported the evacuation of some of its staff.
Oil prices remain volatile. The price of US crude rose to $99.64 per barrel, whilst Brent climbed to $112.57. Company executives note that actual supplies are more severely constrained than is reflected in futures market prices.
Shell CEO Wael Sawwan said that the main factor is the physical supply of energy sources. According to him, the shortage is already affecting aviation fuel and could next affect diesel and petrol.
TotalEnergies CEO Patrick Pouyanné stated that prices for aviation fuel and diesel have risen sharply. He also noted that China has banned the export of petroleum products, whilst Thailand has introduced petrol rationing.
According to company executives, the effects of the shortage are already spreading to Asian countries and could reach Europe in April. Governments are stockpiling supplies and restricting access to resources.
Iranian expert Vali Nasr stated that the war could drag on, and the risk of further escalation remains high. He noted that Iran is not seeking a ceasefire and views the Strait as a key lever in the conflict.
Former US Defence Secretary Jim Mattis said the conflict has reached an impasse and could enter a new phase of escalation. He also noted that protecting shipping in the region will be a difficult task.
