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Iran’s blockade of the Hormuz Strait has removed nearly a billion barrels of oil from the market, while shortages have grown more acute as the sea lane remains closed.
Executives at major oil and gas companies told investors in earnings calls over the past two weeks that the disruption is likely to drive significant changes to the global energy system.
The closure of the Hormuz Strait has taken nearly a billion barrels of oil out of supply and has made shortages more severe as the route remains closed. Several executives pointed to the fragility of the global energy system and the vulnerability of import-dependent economies, particularly in Asia.
Company leaders said governments and the industry will prioritize energy security. They expect increased focus on rebuilding energy resilience through both supply and infrastructure measures, including:
Olivier Le Peuch, CEO of SLB, said the disruption has highlighted the fragility of the global energy system. Lorenzo Simonelli, CEO of Baker Hughes, said the event will spur structural changes across the energy landscape and that the response is not only about adding supply, but about building more robust and resilient infrastructure.
Executives also said the closure has underscored the vulnerability of Middle East crude oil and LNG supplies for Asian economies. They added that governments will move to diversify energy supplies and rebuild oil stocks affected by the conflict.
Simonelli said global energy inventories are expected to be rebuilt to levels above historical norms to keep energy security a top priority.
Kaes Van’t Hof, CEO of a major U.S. shale producer, said U.S. crude will become more important for global energy security. He noted that U.S. crude exports reached a record high during the war.
Jeffrey Miller, CEO of Halliburton, said the oil market is tighter due to supply disruptions and that it has shifted from expectations of oversupply this year to a substantial deficit.
Le Peuch said the disruption is likely to support oil prices staying high after the conflict ends. He added that higher prices would encourage investment in offshore and deep-water opportunities in Africa, the Americas, and Asia.
He said Africa is among the most attractive long-term opportunities due to large untapped oil and gas resources, and that SLB expects asset allocation to shift over time in a favorable direction for the region.
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