ExxonMobil CEO Darren Woods expressed concerns about potential disruptions to oil supplies due to the ongoing conflict between Israel and Iran. The primary concern is the Strait of Hormuz, a vital oil chokepoint located between Oman and Iran.
Woods stated that there is sufficient spare capacity in the global market to accommodate any Iranian oil that may be disrupted. However, he warned that any impact on infrastructure or shipping past the Strait of Hormuz could have significant effects.
Iran produces approximately 3.3 million barrels per day of crude oil, but only about 1.6 million barrels per day are exported. This accounts for less than 2% of total global demand. The Strait of Hormuz handles around 20 million barrels per day, equivalent to 20% of global petroleum liquids consumption.
The conflict has led to increased tensions and a surge in oil prices, with US West Texas Intermediate prices reaching $72 a barrel. However, export capacity was spared from the recent attacks, which Woods attributed to “quite purposeful” efforts not to disrupt the oil supply.
Industry expert Andy Lipow estimates that a disruption could raise prices by up to $7.50 per barrel. Retaliatory targets for Iran include oil tankers headed to the US through the Strait of Hormuz, which could have a significant impact on prices.
The situation remains fluid, with both countries exchanging strikes and missile hits. The incident highlights the importance of the Strait of Hormuz as a critical node in global energy trade.
Source: https://www.foxbusiness.com/markets/exxonmobil-ceo-talks-oil-supply-amid-iran-israel-conflict