Chevron CEO Issues Stark Warning

Mike Wirth, CEO of Chevron Corp, issued a stark warning regarding the oil market.

Here's what he said:

“There are real physical manifestations from the closure of the Strait of Hormuz that are working their way around the world and through the system that I don’t think are fully priced into the futures curve on oil,”

I feel like we called this early, early on. Because of my training as a Naval Officer, I knew immediately that the Straight closing was going to be Iran's first move in an existential crisis. That's the power of Flank imo: non-finance professionals talking about the small parts of the global markets that we understand </flank-pride> ;)

The futures curve for West Texas Intermediate shows expected crude prices to be about $82 per barrel in July and falling to $73 by December. The market has priced oil to remain in the $70s for most of 2027. Before the conflict, those futures were in the $50-60s range.

Traders are operating with very little clarity on how this conflict will actually play out, which is showing up in the oil market. As Chevron’s CEO pointed out, pricing right now is being driven more by perception than by hard fundamentals, making the market highly volatile and difficult to model.

The physical supply situation is already tightening. Estimates from S&P Global suggest roughly 6.5 to 7 million barrels per day are currently offline in the Middle East, with that number expected to climb toward 8 to 9 million in the near term. A large portion of global oil flows through the Strait of Hormuz, and about 80% of that supply is headed to Asia, so disruptions here ripple globally very quickly.

What’s most concerning is that this isn’t a typical supply shock.

Industry experts are describing it as an “availability crisis,” meaning some regions may simply not be able to secure enough oil at any price. There isn’t really a historical playbook for this type of disruption, which is why pricing feels so unstable right now.

Sentiment: Burn, baby, burn. Our generation needs a chance to get into the market at fire-sale prices.