TLDR
- Chevron CEO Mike Wirth says oil futures are not reflecting the real physical impact of the Strait of Hormuz closure
- An estimated 6.5–9 million barrels of daily oil supply are currently offline in the Middle East
- WTI crude briefly hit $101 a barrel, then dropped back to around $87 after Trump signalled talks with Iran
- Asia faces growing energy availability problems, with diesel and jet fuel markets already showing tightness
- Goldman Sachs raised its 2026 WTI forecast to $79 per barrel from $72, expecting the war to last longer than first thought
Chevron (CVX) CEO Mike Wirth stepped up to the podium at S&P Global’s annual CERAWeek conference in Houston on Monday and said what many in the room were quietly thinking: oil markets are not taking this seriously enough.
Wirth told the crowd that the physical consequences of the Strait of Hormuz closure are already moving through the global energy system — but crude futures are not reflecting that reality.
“There are real physical manifestations from the closure of the Strait of Hormuz that are working their way around the world and through the system that I don’t think are fully priced into the futures curve on oil,” Wirth said.
He warned that futures traders are making moves based on “any kind of perception” and described the market as “uncertain,” “unpredictable,” and “volatile.”
CVX stock was up 1.73% on the day, even as crude prices tumbled. Brent crude fell 12% to $98.95 a barrel in afternoon trading on March 23, while WTI dropped 11% to $87.73. The drop came after President Trump announced talks with Iran and said he would pause threatened strikes for at least five days.
Oil Supply Crunch Already Showing Up
The numbers behind Wirth’s warning are sobering. According to S&P Global Energy, approximately 6.5 to 7 million barrels of daily oil supply are currently offline in the Middle East. That figure is expected to climb to 8 or 9 million barrels within days.
Around 80% of the oil that normally flows through the Strait of Hormuz is destined for Asia, and the region is already starting to face what Kurt Barrow of S&P Global Energy called an “availability crisis.”
“Some countries will have to go without oil,” Barrow said. “There’s no model for this.”
Diesel and jet fuel markets are showing tightness, Wirth said. Even if a ceasefire is reached quickly, restoring production won’t happen overnight. Experts say it could take weeks, months, or even years in some cases.
“Some of these facilities suffered damage and in some cases reportedly significant damage. How quickly that production can come back on-line is an uncertainty that we are going to have to deal with,” Wirth said.
Futures Markets Still Playing Catch-Up
The WTI futures curve currently shows prices around $82 a barrel in July, falling to the $73 range by December. The market has priced oil to stay in the $70s for most of 2027. Before the conflict, those futures were trading in the $50–60s range.
Wirth’s point is that even this elevated pricing likely isn’t high enough given the physical damage to infrastructure and the scale of supply being taken offline.
WTI briefly hit $101 a barrel and Brent shot to $113 late Sunday on concerns about potential U.S. strikes on Iranian power plants. Prices dropped sharply Monday morning after Trump postponed those strikes.
Goldman Sachs revised its 2026 WTI oil price forecast to $79 a barrel from $72, based on the assumption that Strait of Hormuz oil shipments will remain at roughly 5% of normal levels for at least two more weeks.
CVX has a consensus Strong Buy rating among 21 Wall Street analysts, with 16 Buy and five Hold recommendations. The average price target sits at $197.25.
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