Houston (AFP) – A top US official in President Donald Trump’s government sought to reassure fears about the oil market Monday as war raged on in the Middle East, although industry leaders remain wary. US Energy Secretary Chris Wright told the annual CERAWeek conference in Houston that disruption to global energy flows is “temporary,” as costs surged after US-Israeli strikes on Iran prompted Tehran’s retaliation that virtually blocked the Strait of Hormuz. Wright said Washington has adopted “pragmatic solutions,” such as by helping oil flow to Asian refineries. The United States also started releasing oil from its strategic reserves on Friday. “But these are mitigants of a situation that’s temporary,” he stressed to a packed ballroom.
His comments came as energy industry leaders converged in Texas this week under the cloud of oil and gas supply disruptions from the war launched by the United States and Israel against Iran in late February. More than 10,000 attendees are expected for CERAWeek, the spring gathering that has taken on unexpected importance as fuel prices rocket after the war began. Lines formed to enter a venue where CEOs spoke as industry experts kept up with the conflict. Wright said the United States would be able to release up to 1.5 million barrels of oil a day, and this could get close to three million barrels. Attacks on critical energy facilities in Iran, Qatar, and other Gulf countries have exacerbated global supply problems.
Oil prices tumbled Monday as Trump suddenly ordered a halt on strikes targeting Iranian infrastructure following “very good” talks. But Tehran denied that negotiations were underway. Wright told CNBC on Monday that even though the world is undergoing a “short-term period of disruption” now, “the long-term benefits will be enormous.”
Separately, the chief of UAE state energy company ADNOC slammed Tehran’s actions to effectively block the Strait of Hormuz, a key waterway for global energy supplies. “Weaponizing the Strait of Hormuz is not an act of aggression against one nation,” Sultan Ahmed Al Jaber said in virtual remarks to the conference. “It’s economic terrorism against every nation. And no country should be allowed to hold Hormuz hostage,” he added. TotalEnergies chief Patrick Pouyanne expects “very high” liquefied natural gas prices by the summer if the strait is not reopened. “I can predict a very high price for LNG by summer and September, when we are refilling the gas storage in Europe,” the French executive added.
US energy giant Chevron’s chief executive Mike Wirth warned that oil prices have yet to fully factor in the fallout from the blockade. “In particular, Asia is facing some real concerns about supply,” he said, citing government measures to conserve stocks. Even after the war ends, it will take time to rebuild inventories, he added.
While Wright proclaimed Monday that “America’s superpower is natural gas,” the world’s biggest economy also signed an agreement with TotalEnergies to end the French company’s offshore US wind farm projects. The funds would be redirected towards fossil fuel production, with US Interior Secretary Doug Burgum saying the deal was worth “nearly $1 billion.” “We’re partnering with TotalEnergies to unleash nearly $1 billion that was tied up in a lease deposit that was directed towards the prior administration’s subsidies that were pushing expensive weather-dependent offshore wind,” said Burgum.
The conference gathers experts from industry, finance, government, and academia to discuss energy and other topics including trade and artificial intelligence. Besides the war, much of the attention this year again centers on the profound reorientation of US energy and environmental policy under Trump. Since returning to the White House in 2025, Trump has embraced fossil fuels while tearing up most of his predecessor Joe Biden’s policies aimed at mitigating climate change. This year’s conference also features a plenary event with Venezuelan opposition leader and Nobel Peace Prize laureate Maria Corina Machado, who is due to speak Tuesday night.
© 2024 AFP
