Chevron CEO Mike Wirth has sounded the alarm over the Trump administration's potential diesel export ban. Speaking on CNBC's "Squawk Box Europe, " he warned that such a move could worsen supply issues. Wirth stressed how critical it is for the U. S. to remain a dependable energy supplier to global markets, especially when times get tough.
His comments come as Middle East crude exports rise and a G7 emergency release of stockpiles has somewhat eased supply fears. But tensions are still running high. Saudi Arabia and Iran-backed Houthi forces continue to exchange attacks, which complicates the energy situation even further.
The ongoing U. S.-Iran conflict has thrown a wrench into shipping through the Strait of Hormuz. This critical passageway handles about 20% of the world's oil and liquefied natural gas supplies. The disruption has sent shockwaves across the global economy, leading U. S. President Donald Trump to reconsider the diesel export ban. Instead, Trump green-lighted the broader use of red-dyed diesel, usually reserved for non-highway vehicles, to help curb record-high fuel costs.
On Monday, Trump signed an executive order allowing truckers and farmers to use red-dyed diesel, which is exempt from the 24.4-cent-per-gallon highway fuel tax, until the end of the year. This measure is aimed at providing temporary relief during the ongoing energy crisis.
Wirth pointed out the fragility of global oil inventories, describing the situation as "very serious." He explained that while high inventories initially cushioned the system, these reserves have been significantly depleted in recent months. "Over the last several months, we've seen commercial inventories draw down, strategic stocks be released and those sanctioned barrels have been relieved and allowed to be delivered as well, " he said.
Saudi Aramco CEO Amin Nasser shared these concerns, suggesting it could take up to two years to rebuild global oil inventories. The prolonged U. S.-Iran conflict continues to threaten supply stability, highlighting the precarious energy landscape.
In an effort to strengthen its position, Chevron has announced plans to more than double its oil production in Venezuela over the next five years. With a $7 billion investment, the company aims to boost production to 600,000 barrels per day by 2031, up from the current 280,000 barrels per day.
Wirth expressed optimism about Venezuela's potential to contribute to a more stable energy system, though he acknowledged the country's output is limited compared to the risks from Middle Eastern tensions. "Longer term, I think Venezuela can be part of a more secure energy system, " he noted.
Despite recent market fluctuations, Chevron's stock has been performing well, with shares up over 36% year-to-date. The company's long-term strategy in Venezuela underscores its commitment to expanding its global energy footprint amid a volatile market.
