Chevron CEO Warns Depleted Oil Buffers Could Drive Prices Higher

Chevron (CVX) CEO Mike Wirth warned on Friday that the global oil buffers that helped limit crude price increases earlier in the year have been exhausted, creating potential for higher prices in the near future. Wirth's comments came during an energy conference at the University of Texas at Austin.

Upside Risk for Crude Prices

According to Wirth, measures such as the release of strategic stockpiles and oil stored on ships from sanctioned countries have now been "played out." These actions had previously provided a cushion against supply disruptions following the start of the Iran war.

"It’s harder to envision a scenario where prices soften and quickly," Wirth said, as reported by Reuters. "I think the risks remain to the upside over the next few months."

Market Pressures and Geopolitical Context

The CEO's remarks come as energy markets are already showing signs of strain. The average price for diesel in the U.S. reached $6 per gallon for the first time on Thursday, with supply squeezed by the ongoing war and recent Ukrainian attacks on Russian refineries. Brent crude futures are currently on pace for a weekly gain of 8%.

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Wirth also noted that Chevron has seen fewer impacts on its operations in Kazakhstan after the U.S. administration spoke with Ukraine regarding attacks on oil infrastructure in the Black Sea region. Chevron operates the Tengiz oilfield in Kazakhstan and is a partner in the Caspian Pipeline Consortium.

Chevron's Venezuela Expansion

Separately, Wirth detailed Chevron's plans for its operations in Venezuela. The company intends to fund a planned $7 billion investment to expand its activities entirely with cash generated from its three existing joint ventures in the country.

The goal is to more than double production to approximately 600,000 barrels per day by 2031. "We’ll live entirely within the means of those ventures’ ability to generate cash, not bring in cash from the outside," Wirth affirmed.