Energy Chiefs Warn Trump that Oil Crunch Will Get Worse With 10 Million Barrels Stuck in the Strait of Hormuz

Oil chiefs have warned the Trump administration that the oil price and supply crisis triggered by the Iran war is going to get worse in the days ahead.

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Oil Price Warning

According to an article in the Wall Street Journal, the Chief Executives of oil giants Exxon Mobil XOM +1.69% ▲ , Chevron CVX -0.08% ▼ and ConocoPhillips COP +1.36% ▲ have handed down the warning to U.S. officials in a series of meetings at the White House, including with Energy Secretary Chris Wright and Interior Secretary Doug Burgum.

The big oil bosses said that the disruption to the flows of oil and gas through the vital Strait of Hormuz waterway would continue to create volatility in global energy markets.

Exxon Chief Executive Darren Woods saId that oil prices could rise beyond currently elevated levels if speculators unexpectedly bid on higher prices. He also warned that markets could face a supply crunch of refined products.

Industry bosses also noted that domestic production increases in the U.S. are likely to remain modest and will not be able to replace the roughly 9 million to 10 million barrels of oil a day trapped behind the Strait of Hormuz.

Trump Calls for Warship Support

Iran, which largely controls the Strait, has closed it to shipping and launched attacks on vessels. At the weekend President Trump called on his allies – such as the U.K. and France – to send warships to help alleviate the supply chain crunch at the Strait.

The squeeze on supply as well as continued attacks on oil depots and refineries in the Gulf states has seen the oil price rocket higher since the U.S. and Israel began its war on Iran late last month.

It’s also seen oil stock prices surge higher with XOM, for example, up 36% over the last three months. Higher prices are good for oil firms, but not if there is a crunch in supply and an economic slowdown alongside it.

Trump was not present at the meetings. But he hasn’t been shy of expressing his own views.

In a Truth Social post at the weekend Trump blasted: “Hopefully China, France, Japan, South Korea, the UK, and others, that are affected by this artificial constraint will send ships to the area so that the Hormuz Strait will no longer be a threat by a nation that has been totally decapitated. In the meantime, the United States will be bombing the hell out of the shoreline, and continually shooting Iranian Boats and Ships out of the water. One way or the other, we will soon get the Hormuz Strait OPEN, SAFE, and FREE!”

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