In Houston, leading global oil executives and energy ministers expressed escalating concerns regarding the prolonged economic consequences of a war involving the US, Israel, and Iran. US Energy Secretary Chris Wright, however, downplayed the severity of the crisis.
The conflict has triggered one of the most severe energy supply disruptions in history, following Iran's effective closure of the critical Strait of Hormuz shipping route and attacks causing long-term damage to production infrastructure across the Middle East. Despite a market sell-off prompted by President Donald Trump's announcement of negotiations with Iranian officials to end the conflict, the global benchmark Brent crude remained at $99 per barrel on Monday afternoon.
Patrick Pouyanné, CEO of TotalEnergies, stated, "The consequences extend beyond just high energy prices. It will damage other supply chains." He also highlighted disruptions to helium shipments from the Middle East, a gas crucial for semiconductors and medical supplies.
Secretary Wright, speaking at the annual CERAWeek conference in Houston, asserted that oil prices had not yet climbed to a level that would significantly harm demand. Since the conflict began, gasoline prices have surged over 30%, reaching nearly $4 per gallon, the highest level since 2022. Wright maintained that the US had no alternative but to engage in the conflict with Iran.
"This is a conflict we simply could not postpone," Wright said. He noted that the administration had taken measures to stabilize energy markets, including releases from the Strategic Petroleum Reserve and facilitating oil shipments to specific locations in China.
Conversely, analysts from JPMorgan stated on Monday that the supply disruptions had "rapidly translated into broad-based shortages of crude and refined products across Asia."
The annual conference attracted over 10,000 participants from more than 80 countries. This marks the second time in the past five years the event has been held during a major global energy disruption. Monday's sessions were exceptionally crowded, with some attendees unable to enter the large ballrooms reserved for specific speakers.
The 2022 conference was held just weeks after the outbreak of the Russia-Ukraine war, which also caused a sharp spike in oil prices.
**Executives Voice Concerns**
Shortly after Wright's remarks, Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company, warned that rising oil prices are slowing global economic growth.
"This is increasing the cost of living for those who can least afford it and is slowing economic growth worldwide. The human cost is mounting daily, from factories to farms to families across the globe," Al Jaber said.
Ben Marshall, President of Vitol Americas, cautioned that severe demand destruction would occur globally if oil prices reached $120 per barrel. Brent futures had briefly surged to $119 per barrel in early March.
The war has effectively shut down the Strait of Hormuz, a conduit for one-fifth of the world's oil and gas supply. Simultaneously, key infrastructure in the Middle East, including QatarEnergy's massive liquefied natural gas facilities, has been attacked, with repairs expected to take years. Economists have begun factoring in the resulting worsening inflation; BNP Paribas has raised its 2026 core inflation forecast from 2.9% to 3.2%.
"It will take time to work our way out of this situation," said Mike Wirth, CEO of Chevron, speaking at the conference on Monday. He indicated that the strain on energy markets from the Strait's closure is not yet fully reflected in forward oil prices.
Takehiko Matsuo, Japan's Vice-Minister for International Affairs, stated that the International Energy Agency member countries' effort to release a record 400 million barrels from strategic reserves was insufficient to calm the markets. Import-dependent Japan contributed approximately 80 million barrels to this effort, second only to the US release of 172 million barrels.