economy
Chevron CEO says Iran war impact isn't fully priced into oil market, traders have ‘scant information’
Chevron CEO Mike Wirth said the physical supply of oil is much tighter than the oil futures market suggests.
TL;DR
- Chevron CEO Mike Wirth believes oil futures do not fully reflect the supply disruption from the Strait of Hormuz closure.
- He argues that the physical supply of oil is tighter than futures contracts indicate.
- Market trading is based on limited information and perception, with oil prices plunging over 10%.
- About 20% of world oil supplies flowed through the Strait of Hormuz before recent attacks.
- Rebuilding oil inventories will take time even if the strait reopens.
- Uncertainty exists regarding how quickly production can resume.