Oil executives warn of the long-term impact of Iran conflict

In Houston, some of the world’s top oil executives and energy ministers are expressing growing concern about the long-term impact that a U.S.-Israel war with Iran will have on the global economy, while U.S. Energy Secretary Chris Wright is downplaying the crisis.

After Iran, in practice, shut down the key Strait of Hormuz shipping lane, and attacks in the Middle East caused long-term damage to production infrastructure for multiple countries, the war has triggered one of the most severe energy-supply disruptions in history. Even after President Donald Trump said he is negotiating with Iranian officials to end the conflict that has sparked a selloff in markets, global benchmark Brent crude held at $99 per barrel on Monday afternoon.

“ The fallout is not just high energy prices. It will damage other supply chains,” said Pan Yanshi, CEO of TotalEnergies. He also noted that shipments of helium from the Middle East have been disrupted as well. Helium is critical for semiconductors and medical supplies.

Speaking at the annual CERAWeek conference in Houston, Wright said oil prices have not climbed to a level high enough to damage demand. Since the conflict began, gasoline prices have surged more than 30%, reaching nearly $4 per gallon—the highest level since 2022. But Wright said the United States has no choice but to go to war with Iran.

Wright said, “This is a conflict that we fundamentally can’t put off.” He said the government has taken steps to stabilize energy markets, including releasing strategic petroleum reserves and helping ship oil to specific locations in China.

However, on Monday, analysts at JPMorgan said that the supply disruption has “quickly turned into a widespread shortage of crude oil and refined products across Asia.”

More than 10,000 attendees from over 80 countries participated in the annual event, which is the second time in the past five years that the event has been held amid major global energy disruptions. Monday’s event was unusually crowded, and some attendees couldn’t even get into the spacious banquet hall prepared for particular speakers.

The 2022 conference was held just weeks after the outbreak of the Russia-Ukraine conflict, which also caused oil prices to surge.

Executives Express Concern

Shortly after Wright’s remarks, Sultan Al Jaber, CEO of Abu Dhabi National Oil Company, warned that rising oil prices are slowing global economic growth.

Al Jaber said, “This is driving up living costs for those who can least afford it, while slowing economic growth around the world. From factories to farms, and to households everywhere, the cost borne by humanity is rising.”

Ben Marshall, president of Vitol’s Americas region, warned that if oil prices reach $120 per barrel, there will be severe demand destruction globally. Brent crude oil futures briefly surged to $119 per barrel in early March.

The war has effectively shut down the Strait of Hormuz, which carries transport for one-fifth of the world’s oil and gas supply, and key infrastructure in the Middle East—including the giant LNG facilities of QatarEnergy—has also been attacked, with repairs expected to take years. Economists have begun factoring in the worsening inflation that it will trigger, and Bank of France (BNP Paribas) has raised its forecast for core inflation in 2026 from the earlier 2.9% to 3.2%.

On Monday at the conference, Chevron CEO Mike Wirth said, “Getting out of this situation will take time.” He said that the energy market tightness caused by the closure of the Strait of Hormuz has not yet been fully reflected in forward oil prices.

Matsuo Takehiko, Deputy Minister for International Affairs of Japan, said that efforts by member countries of the International Energy Agency to release a record 400 million barrels of oil from strategic reserves are not enough to calm the market. Japan, which relies on imports, released about 80 million barrels of oil for this purpose, contributing only after the United States, at 172 million barrels.

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责任编辑：张俊 SF065