Chevron CEO Mike Wirth on Red Sea attacks, energy transition and oil prices

Chevron CEO Mike Wirth joins ‘Squawk Box’ to discuss the impact of Red Sea attacks on the company and global oil supply, energy transition, price outlook, regulatory challenges, and more.

>>> WELCOME BACK, EVERYBODY. ENERGY, ONE OF THE KEY TOPICS HERE IN DAVOS THIS YEAR, AND SEEMINGLY EVERY YEAR AT THIS POINT. AND JOINING US RIGHT NOW TO TALK ABOUT THIS AND MUCH MORE IS CHEVRON CEO, MIKE WIRTH. MIKE, WELCOME. >> THANK YOU >> GOOD TO SEE YOU

I WANT TO THINK SOMETHING RIGHT INTO THE NEWS OF THE DAY SOMETHING WE HAVE NOT TALKED ABOUT IS A SITUATION THAT’S GOTTEN INCREASINGLY CONCERNING, AND THAT’S THE SITUATION IN THE RED SEA WITH THE HOUTHI REBEL ATTACKS. THEY HAVE NOW SAID THAT THEY’RE

GOING TO BE TARGETING NOT JUST ISRAELI-BOUND SHIPS, NOT JUST ISRAELI SHIPS, BUT AMERICAN AND BRITISH SHIPS AS WELL, BECAUSE OF THE BACK AND FORTH IN THE ATTACK IN YEMEN LAST WEEK. WHAT DOES THIS MEAN FOR YOU? HOW CLOSELY ARE YOU WATCHING THIS AND WHAT DOES IT MEAN FOR

THE GLOBAL OIL SUPPLY? >> WELL, WE WATCH IT VERY CLOSELY. THE SAFETY OF OUR PEOPLE IS THE MOST IMPORTANT THING THAT WE WORK ON EVERY SINGLE DAY WE HAVE SHIPS THAT GO THROUGH THE ARABIAN GULF AND THE RED SEA REGULARLY. LAST YEAR, WE HAD TWO SHIPS

ATTACKED BY THE IRANIAN NAVY WE HAD ONE SHIP WHO WAS BOARDED OFF HELICOPTERS BY COMMANDOS AND THE SHIP WAS ACTUALLY HIJACKED AND TAKEN INTO AN IRANIAN PORT WE HAD ANOTHER ONE THAT TOOK FIRE SENIOR SEVERAL HOURS, UNTIL THE U.S. NAVY INTERCEDED SO WE WORK VERY CLOSELY WITH THE FIFTH FLEET.

WE COORDINATE EVERY VESSEL MOVEMENT WITH, YOU KNOW, OTHER MILITARY AUTHORITIES THAT ARE IN THE REGION BUT IT’S A VERY SERIOUS SITUATION, AND IT SEEMS TO BE GETTING WORSE. TO THIS POINT, WE HAVEN’T SEEN MUCH IN MARKETS. >> WTI, BELOW $73 THIS MORNING THAT COMES AS A SURPRISE TO ME

DOES IT SURPRISE YOU >> WELL, IT DOES, BECAUSE THE RISKS ARE VERY REAL, AND SO MUCH OF THE WORLD’S OIL FLOWS THROUGH THAT REGION. WERE IT TO BE CUT OFF, YOU COULD SEE THINGS CHANGE VERY RAPIDLY THUS FAR, WE’VE BEEN ABLE TO MAINTAIN OUR MOVEMENTS THROUGH THE REGION, AND OTHERS HAVE AS

WELL THIS IS AN EVOLVING SITUATION AND WE HAVE TO WATCH VERY CAREFULLY. >> LET’S TALK ABOUT WHAT’S HAPPENING HERE IN DAVOS. WE HAVE SEEN ENERGY HAS BEEN A FOCUS HERE FOR YEARS, AND IT HAS, BUT IT’S GENERALLY PEOPLE LOOKING FOR RENEWABLE SOLUTIONS TO THE CLIMATE CHANGE ISSUES

THAT ARE GOING ON HERE THAT’S BEEN A FOCUS OF DAVOS FOR YEARS. YOU’VE BEEN VERY VOCAL ABOUT THE IDEA THAT WE NEED TO HAVE LOWER EMISSIONS, BUT IT SHOULDN’T COME AT THE EXPENSE OF AFFORDABLE AND RELIABLE ENERGY SUPPLY WHAT IS THAT MESSAGE HERE? HOW DOES IT RESONATE

>> I ACTUALLY THINK THE DISCUSSION HAS REVEVOLVED HERE A LITTLE BIT AS YOU WELL KNOW, FOR A NUMBER OF YEARS, THE FOCUS WAS ALMOST EXCLUSIVELY ON CLIMATE >> RIGHT AND THERE ARE THREE THINGS THAT REALLY MATTER WHEN IT COMES TO ENERGY IT’S AFFORDABILITY, IT’S RELIABILITY, AND THE IMPACT ON THE ENVIRONMENT.

AND YOU HAVE TO TAKE ALL THREE OF THOSE INTO CONSIDERATION. AS YOU TALK ABOUT ENERGY AS A PART OF OUR ECONOMY. AND WE’VE CERTAINLY SEEN IN EUROPE WHEN RELIABLE SUPPLY IS THREATENED, PRICES SS RESPOND A THE ECONOMY FEELS IT I FIND A MORE BALANCED CONVERSATION UNDERWAY,

CERTAINLY, NOT LESS CONCERN ABOUT THE CLIMATE, BUT I THINK MORE RECOGNITION THAT RELIABLE SUPPLY AND AFFORDABLE ENERGY MATTER AND THAT WE HAVE AN ENERGY SYSTEM TODAY THAT HAS THE MIX THAT IT HAS. AND YOU CAN’T CHANGE THIS OVERNIGHT. AND SO IT’S GOING TO TAKE TIME,

IT’S GOING TO TAKE TECHNOLOGY, CAPITAL MARKETS, AND INVESTMENT IN ORDER TO SCALE SOME OF THESE NEW TECHNOLOGIES AND WE’RE ON THAT PATH, BUT THIS IS NOT SOMETHING THAT CAN CHANGE AS RAPIDLY AS MOST PEOPLE WOULD LIKE TO BELIEVE THAT IT CAN. >> DO YOU THINK THAT, FOR

EXAMPLE, THE CLIMATE AGREEMENT, IT WAS MUCH MORE PUNITIVE FOR THE UNITED STATES VIS-A-VIS INDIA AND CHINA, AND WE’RE ALREADY IN MUCH BETTER SHAPE IN TERMS OF CONTROLLING A MISSION IT’S ALMOST AS IF WE WERE TAKEN — I WORRY ABOUT LESS-DEVELOPED COMPANIES HAVING TO LIVE BY RULES ESTABLISHED

HERE BY THE GLOBAL ELITE IN DAVOS, THAT YOU LET THEM EAT CAKE YOU CAN’T HAVE HYDROCARBONS? >> BASICALLY, YOU’RE SAYING TO OTHER PEOPLE, THAT YOU HAVE TO LOWER YOUR STANDARD OF LIVING — >> YOU CAN’TCOME INTO THIS FIRST WORLD LIKE THE REST OF US. YOUR ECONOMIES CAN’T GROW.

YOU’RE NOT GOING TO HAVE THE HYDROCARBON NECESSARY FOR YOU TO GROW THERE’S BEEN A BACKLASH. THIS IS COMING HOME TO ROOST WHEN PEOPLE DON’T HAVE ENERGY, WHEN THINGS COST TOO MUCH AND YOUR ECONOMY GOES INTO A RECESSION. WHEN EUROPE LOOKS LIKE THEY DODGED A BULLET WITH RUSSIA AND

NATURAL GAS, IT COULD HAVE BEEN MUCH WORSE >> THIS IS THE TENSION THAT’S BEEN DEVELOPING. HOW DO THEY ALLOW THEIR ECONOMY TO DEVELOP IN A WAY THAT’S COMPETITIVE AND RAISES THE STANDARD OF LIVING AND THAT’S MAYBE A VERY DIFFERENT SOLUTION THAN WHAT YOU SEE IN THE DEVELOPED WORLD,

WHERE YOU’VE GOT ALREADY GREAT WEALTH AN ECONOMY THAT IS WELL DEVELOPED, WHETHER YOU’RE TALKING EUROPE OR THE U.S., AND THE ABILITY TO AFFORD THINGS IS VERY DIFFERENT >> THE COAL PLANTS THAT WE KNOW, ARE THEY ALL CLEAN COAL? >> I’M NOT AN EXPERT ON CHINESE

COAL, BUT THERE’S STILL A LOT OF COAL-FIRED POWER BEING DEVELOPED. >> THEY NEED POWER FROM THE GRID THAT DOESN’T COME FROM WIND AND SOLAR. >> AND NUCLEAR AS PART OF THAT AS WELL. >> DO YOU THINK DAVOS IS — IT’S DIFFERENT. IT’S ALMOST DAVOS 2.0, ISN’T IT?

>> DO YOU THINK ANYONE REALIZES THEY’RE COMING HERE ON A GULF STREAM PROBABLY WASN’T A GOOD LOOK WHEN THEY’RE PILED UP AT THE AIRPORTS >> I WAS THINKING BACK THE U.S. A POLITICAL QUESTION, WHICH IS YOU SAW GAS PRICES GO UP AND DPAS PRICES GO DOWN.

PRESIDENT BIDEN BLAMED FOR IT GOING UP A QUESTION ABOUT WHETHER HE GETS CREDIT FOR IT GOING DOWN >> THEY’RE STILL 50% ABOVE WHERE IT STARTED >> THE QUESTION THAT I HAVE, IS THE CEO OF A COMPANY IN THIS SPACE, HOW DO YOU THINK ABOUT

THE POLITICS AND HOW IT RELATES TO PRICE FOR THOSE WATCHING, TRYING TO THINKING ABOUT WHAT’S HAPPENING IN THE COUNTRY >> THE PRICE OF GASOLINE IS SET BY SUPPLY AND DEMAND AND COMPETITION. IT’S NOT SET BY THE PRESIDENT OF THE UNITED STATES, NOT SET BY

CEOs OF OIL COMPANIES, IT’S SET BY MARKETS IT’S A GLOBALLY TRADED COMMODITY. AND PRICES WENT UP BECAUSE PRICES WENT UP WHEN THE WAR IN UKRAINE CAME OUT, PRICES CAME DOWN AS PEOPLE REALIZED THAT OIL SUPPLIES WEREN’T THREATENED. THERE WERE SANCTIONS THAT WERE IMPOSED ON RUSSIA, BUT THE

RUSSIAN OIL KEPT COMING INTO THE MARKET THE SANCTIONS THAT WERE IMPOSED ON IRAN HAVE NOT — >> BUT DO YOU CRIEDIT OR BLAME PARTICULAR PRESIDENT FOR PIPELINES THAT ARE BUILT OR NOT BUILT OR PORTS OR THAT ARE OPEN OR NOT OPEN.

>> BUT THAT’S A DIFFERENT ISSUE THAN THE PRICE OF GASOLINE TODAY. THAT’S AN INVESTMENT IN LONG-TERM INFRASTRUCTURE, LONG-TERM ENERGY SUPPLY AND ENERGY SECURITY. THOSE ARE IMPORTANT ISSUES, BUT THEY’RE NOT REALLY RELEVANT TO THE PRICE OF GASOLINE IN THE SHORT-TERM >> THERE’S MORE DRACONIA