Davos 2024: Chevron CEO Surprised Red Sea Hasn’t Impacted Oil Prices

Chevron CEO Mike Wirth says the company makes ship by ship decisions on Red Sea voyages. Wirth speaks on Bloomberg Television at the World Economic Forum’s annual meeting in Davos, Switzerland.

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Clearly a lot of businesses have to reroute business we saw that from AP males the container shipping giant a number of weeks ago some breaking news in the last couple of hours on Sha could you give us the update for you and the team what have you had to change if

Anything at all sure we uh you know we engage with the US Navy and other um security organizations for all of our movements to the Arabian Gulf the Red Sea and on every Voyage we have a security plan and um and it’s really Ship by ship that we uh we evaluate the

Situation so uh we’re working very closely with uh you know the maritime security authorities the risks in the region have been accelerating over the last several weeks uh these are risks we deal with all the time uh last year we had a couple of ships attacked by the

Iranian Navy actually one of them was boarded and um and hijacked into an Iranian Port uh so this is a part of our business that that we deal with we take it very seriously the safety of our people is the most important thing and and the risks in in that part of the

World are very Dynamic and volatile right now have you made any changes in the last few weeks uh We’ve made changes we don’t talk about publicly in terms of the security protocols uh we have not um made fundamental changes to how we’ve been moving ships uh over the last the

Last few weeks are you surprised that we haven’t seen any influence on prices whatsoever I actually am uh that’s a an important part of the world for oil supply and traditionally uh when risks Elevate in in the Middle East you see it reflected in markets uh We’ve not really

Seen that yet um and so um I’m a little surprised so what do you think it would take I mean do you think that the excuse that people use which is that the US is just overwhelming the world with oil and that’s the reason why oil oil prices

Have remained completely immune to any tension in the Middle East do you buy that story well certainly us Supply growth has surprised people to the upside and I think it has helped calm markets a little bit uh but it it certain it has no ability to um cover up

A big disruption in the Middle East uh that will fundamentally change the supply Dynamics in the world if you were to see shipping um halted disrupted or seriously Disturbed and so um I I do think that the US supply has helped kind of calm markets over the longer cycle

But it’s it’s there there’s no no capacity to respond in the short term to an interruption like that 13 million barrels a day Comm just sort of frame this just for a moment how much potential is left how much high can that number go it can go higher uh the US is

Blessed with an abundant uh resource base uh the constraints tend to be right now U the U the capital spending of suppliers how fast suppliers will go a decade ago uh companies in our industry were growing too fast in the in the peran Basin in particular and investors

Were unhappy with that I think we’ve seen companies throttle back Capital spending return cash to shareholders more consistently um if they were to return to the ways of the past I think you could see that that number go higher I I don’t see that going on right now but the US has upside