HOUSTON, March 24 — Some of the world's top oil executives and energy ministers in Houston on Monday expressed growing concern over the long-term effects of the United States (US)-Israel war with Iran on the global economy, while the US Energy Secretary Chris Wright downplayed the crisis.
The war has caused one of the biggest disruptions to energy supplies in history after Iran effectively closed the key Strait of Hormuz shipping route, and as attacks in the Middle East inflict long-term damage on production infrastructure in several countries.
Global benchmark Brent crude was still at US$99 a barrel on Monday afternoon, even after a selloff driven by US President Donald Trump's remarks that he was in talks with Iranian officials to end the conflict.
"The consequence is not only high energy prices. It will damage other supply chains,” said TotalEnergies chief executive officer (CEO) Patrick Pouyanne, pointing also to disruptions of helium shipments from the Middle East. Helium is key for semiconductors and medical supplies.
Wright, speaking at the annual CERAWeek conference in Houston, said oil prices had yet to climb high enough to hurt demand. Gasoline prices have soared by more than 30 per cent to their highest level since 2022, at nearly US$4 a gallon, since the conflict started.
But he said the US had no choice but to go to war with Iran.
"This is a conflict that we simply could not kick down the road," Wright said, adding that the Trump administration had taken steps to calm energy markets, including releases from the Strategic Petroleum Reserve and helping route barrels to specific locations in China.
However, on Monday, JP Morgan analysts said that the shut-ins have already "quickly translated into outright shortages of crude and refined products across Asia."
Over 10,000 attendees from over 80 countries convened at the annual conference, the second time in the last five years that the event has occurred amid a major global energy disruption. The event has been so packed on Monday that some attendees were unable to even access the cavernous ballrooms for specific speakers.
The 2022 gathering took place just weeks after Russia's invasion of Ukraine, which also sent oil prices soaring.
Execs express alarm
Shortly after Wright spoke, Abu Dhabi's state oil company ADNOC's CEO Sultan Al Jaber warned that the jump in oil prices was slowing global economic growth.
"This is raising the cost of living for those who can least afford it and slowing economic growth everywhere. From factories to farms to families around the world, the human cost is mounting by the day," he said.
Trading company Vitol Americas' president and CEO Ben Marshall warned that the world would see severe demand destruction if oil reached US$120 a barrel. Brent futures briefly surged to US$119 a barrel in early March.
The war has effectively shut down the Strait of Hormuz, which carries one-fifth of the world's oil and gas supply, while key infrastructure in the Middle East, including QatarEnergy's massive liquefied natural gas plant, has been hit and will take years to repair.
Economists have started to build in worsened inflation as a result of the disruptions, with BNP Paribas boosting its 2026 core inflation outlook to 3.2 per cent from a previous 2.9 per cent.
"It will take time to come out of this," said Chevron CEO Mike Wirth on Monday at the conference. He noted that the tightness in the energy market due to the closure of the Strait of Hormuz has not been fully priced into forward oil prices.
Japan's International Affairs Vice Minister Takehiko Matsuo said the effort by members of the International Energy Agency to release a record 400 million barrels from strategic reserves was not enough to calm markets.
Japan, which relies on imports, contributed about 80 million barrels of oil to that release, the second-largest after the United States' 172 million barrels.
