economy
Exxon Mobil CEO expects higher oil prices due to Iran war: ‘The market hasn’t seen the full impact’
Oil prices have soared on the risk of escalation and then plunged on hopes for peace before repeating the cycle.
TL;DR
- Exxon CEO Darren Woods warned that the market has not fully experienced the impact of oil supply disruptions from the Iran war and Strait of Hormuz closure.
- The disruption has been temporarily mitigated by oil tankers in transit, strategic petroleum reserves, and drawn-down commercial inventories.
- Woods predicts oil prices will rise if the Strait of Hormuz remains closed and these mitigating factors are exhausted.
- Oil futures have been volatile, with prices fluctuating based on escalation risks and peace hopes.
- Exxon warned of a 750,000 barrels per day decline in Middle East production and a 3% fall in refiner throughput if the strait remains closed through Q2.
- About 15% of Exxon's total production has been impacted by the strait closure.
- Iranian attacks damaged two production lines Exxon has an interest in, impacting about 3% of its upstream production in 2025.
- Exxon's stock has remained flat despite oil price increases since the war began.