Chevron CEO Mike Wirth told CNBC that a U.S. diesel export ban would be unwise, warning it could worsen global supply pressures and shake allies' confidence in the U.S. as a reliable energy supplier. The warning comes as Middle East crude exports and a G7 emergency stockpile release have eased — though not erased — fears over tight diesel supply.
Chevron CEO Mike Wirth warned the Trump administration on Wednesday that moving ahead with a diesel export ban would be unwise, arguing the policy risks making supply pressures worse rather than better.
Export bans could backfire, Wirth says
Export bans, whether imposed by the U.S. or other countries, pull supply off the global market and risk making the situation worse, Wirth told CNBC's "Squawk Box Europe" in an interview. He added that the U.S. has been a reliable supplier to the world at a time when it needs it, and that creating doubt among allies about future supply would be unwise.
His comments follow rising Middle East crude exports and an emergency G7 stockpile release, which appear to have helped ease supply fears. Even so, Saudi Arabia and Iran-backed Houthi forces continue to exchange attacks. The U.S.-Iran war has disrupted shipping through the Strait of Hormuz, a waterway that typically carries around 20% of the world's oil and liquefied natural gas supplies.
President Trump has cooled on authorizing a diesel export ban after G7 countries agreed to release diesel and crude oil from emergency reserves. He signed an executive order Monday to temporarily let truckers and farmers use cheaper red-dyed diesel, which is normally exempt from highway fuel taxes, and deferred related taxes on the fuel through the end of the year.
Energy system 'more vulnerable to disruption'
Asked how fragile global inventories are heading into winter, Wirth described the situation as very serious. He said the world came into the year with high commercial and strategic inventories, plus sanctioned barrels held on the water, but those buffers have since been drawn down, released, or delivered. According to CNBC, Wirth said the drawdown of those buffers means "it makes the system more vulnerable to disruption".
Saudi Aramco CEO Amin Nasser said earlier in the week that rebuilding global oil inventories could take up to two years, warning that supply pressure may still worsen as the U.S.-Iran war continues.
Chevron's Venezuela bet
Chevron has pledged a $7 billion investment to more than double its Venezuela oil production over the next five years. The company aims to raise output to 600,000 barrels per day by 2031, up from about 280,000 bpd currently. Wirth said Venezuela could add to a more secure energy system over time, but that near-term gains there are dwarfed by the volume at risk in the Middle East.
Source: CNBC
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