Exxon expects higher oil prices as market absorbs impact of Iran war
ExxonMobil CEO Darren Woods warned on Friday that the market had not fully absorbed the impact of the unprecedented oil supply disruption triggered by the Iran war and the closure of the Strait of Hormuz.
The large number of loaded oil tankers in transit during the first month of the war eased the disruption, Woods told investors on Exxon’s first-quarter earnings call. The CEO said that strategic oil reserves were also released and commercial stocks were narrowed.
As the conflict continues, one of those sources of supply will be depleted, Woods said. He said that as long as the Bosphorus remains closed, oil prices will increase.
“When you look at the unprecedented disruption to world oil and gas supplies, it’s clear to most that the market has not yet seen the full impact of this,” Woods said.
“There will be even more if the strait remains closed,” the CEO said.
Oil futures trading varied during the war. Prices rose due to bullish risk and then bottomed out on hopes of peace before repeating the cycle. US crude oil While it fell over 3% to $101.38 per barrel on Friday, the international benchmark Brent It dropped nearly 2% to $108.
Those prices are more consistent with historical levels over the past decade than the scale of disruption in the Middle East, Woods said.
Woods expects oil flows from the Persian Gulf to return to normal within a month or two after the strait reopens. Tankers need to be repositioned, supply backlogs need to be worked through, and ships take time to reach their destinations, the CEO said.
Governments and industry will need to replenish strategic reserves and commercial stocks if stocks are depleted once the conflict ends, Woods said. He said this would bring more demand to the market and put upward pressure on prices.
Exxon warned on Friday that its output in the Middle East would fall by 750,000 barrels per day compared to 2025 if the strait remains closed in the second quarter. Production for refineries around the world will fall 3% compared to the fourth quarter of 2025.
About 15% of Exxon’s total production is affected by the strait closure, Woods told CNBC on Friday.
Iran’s attacks on Qatar’s liquefied natural gas export hub damaged two production lines over which Exxon has ownership rights. a filing with the Securities and Exchange Commission in early April. The lines accounted for about 3% of Exxon’s production in 2025.
Exxon shares were down nearly 1% in midday trading. Oil prices have risen nearly 57% at Thursday’s constant price since the war began, while Exxon’s shares have been flat over the same period.
