Exxon Mobil CEO Darren Woods highlighted significant concerns regarding the ongoing oil supply disruption caused by the Iran war and the closure of the Strait of Hormuz. During the company’s first-quarter earnings call, Woods emphasized that the market has yet to fully grasp the implications of this unprecedented disruption, which has been temporarily alleviated by the presence of loaded oil tankers and the release of strategic petroleum reserves. However, he warned that as these sources dwindle, oil prices are likely to rise if the strait remains closed.

The volatility in oil futures reflects the market’s uncertainty, with U.S. crude recently falling over 3% to $101.38 per barrel, while Brent dipped about 2% to $108. Woods noted that these prices do not align with the scale of the disruption, suggesting that further increases are imminent as demand surges when stockpiles are depleted.

A key takeaway for market professionals is that if the Strait of Hormuz remains closed, Exxon’s production could decline by 750,000 barrels per day by 2025, further tightening supply and potentially driving oil prices higher as the market adjusts to these constraints.

Source: cnbc.com