Chevron CEO Warns Global Oil Reserves Depleted, Fuel Prices to Remain High
Translated & summarized from Now 14 by baba
Chevron CEO Mike Wirth warned that global commercial and strategic oil reserves are depleted, leaving the energy system vulnerable to price shocks. He indicated that significant relief in high diesel prices is not expected before 2027 due to limited production and refining capacity. While the US has taken measures like releasing reserves, experts believe these are temporary solutions to the underlying supply issues.
The story in 6 lines · by baba
- Chevron CEO Mike Wirth warned global oil reserves are depleted, increasing system vulnerability.
- Significant relief in high diesel prices is not expected before 2027, according to the IEA.
- Commercial and strategic oil reserves have been significantly drawn down, according to Wirth.
- The fundamental problem is limited flow from major global production areas, Wirth stated.
- US efforts to lower fuel prices are considered temporary by experts.
- Diesel prices have reached record highs in the US and are elevated in Israel.
Mike Wirth, the CEO of Chevron, the second-largest US oil company, has issued a stark warning that global commercial and strategic oil reserves, which have historically protected against market shocks, are now depleted. Wirth stated in an interview with CNBC that the world lacks sufficient mechanisms to absorb fuel price volatility, exacerbated by the war in Iran. He explained that these reserves acted as shock absorbers, buying time, but they have been significantly drawn down, leaving the system more vulnerable to disruptions.
Wirth noted that while global inventories were high at the start of 2026, they have steadily declined since the war began. Companies have utilized their commercial stocks, governments have released strategic reserves, and even oil under sanctions has found buyers. He described the situation as "very serious," emphasizing that releasing reserves is only a temporary fix for the fundamental issue of limited flow from major global production areas.
The strain is particularly evident in diesel prices, which power trucks, trains, and agricultural equipment. In the US, the average price reached a record $6.53 per gallon, exceeding $8 in some areas like California. In Israel, fuel prices hit 8.27 shekels per liter before dropping to 7.77 shekels, with diesel currently at 12 shekels.
According to the International Energy Agency, the diesel market is expected to remain tight until 2027, with significant replenishment of low inventories unlikely before the second half of that year. Efforts by the White House, including releasing 100 million barrels from emergency reserves and securing diesel supplies from Russia, are considered temporary measures by experts, including Wirth, that do not address the core production and refining shortages.