“I think a coordinated response by several countries can help in the short term,” Wirth said in response to a question from CNN during a briefing with reporters. “Certainly, we have seen the markets on edge with concern about supply and supply reliability.”
Brent oil prices closed above $100 a barrel Monday for the first time since 2014. US crude and Brent crude jumped another 5% on Tuesday even as the International Energy Agency met to discuss the response to the Russia-Ukraine crisis.
US President Joe Biden indicated last week that the US was ready to release more oil from the Strategic Petroleum Reserve, the country’s stockpile of oil that was tapped in November in response to higher prices.
“The SPR was intended to be used during times of actual supply disruptions or high risk of supply disruptions,” Wirth said. “Unlike some other times we’ve seen its use perhaps more because of concern about pricing but no real concern about supply, in this case the use of the reserve would be consistent with the purpose for which it was created.”
However, the CEO of Chevron urged the federal government to take broader steps to encourage the long-term development of oil and natural gas.
The invasion of Ukraine has raised concerns about supply disruptions from Russia, the world’s second-largest oil producer. Wirth was confident that wouldn’t happen.
“I haven’t seen anything to suggest that Russia’s intentions, or the intentions of governments involved in sanctions, would be to restrict oil supplies,” Wirth said. “In fact, quite the opposite. It seems to me that people have been very keen to point out that their intent is to try to conserve energy supplies for a world that needs it.”
Chevron said its only real exposure to Russia is through Caspian Sea Pipelines Consortium, A pipeline system that brings crude oil from western Kazakhstan and Russian oil producers. The Russian government and Chevron own stakes in the project, according to its website.
“We have no indications from any government that Caspian Pipeline Consortium operations may be interrupted,” Wirth said, adding that this is an important source of supply, as it transports more than 1 million barrels per day from landlocked Kazakhstan.
High oil prices led to higher prices in Gas pumping to its highest level in seven years. The national average for regular gasoline rose to $3.62 on Tuesday, up about 9 cents a week and 24 cents a month, according to the AAA.
At some point, energy prices can become so expensive that they erode consumer demand and slow the broader economy.
“We have a strong economic recovery underway globally. To this point, economies have been able to absorb higher energy prices and are still growing,” Wirth said. “I think there’s probably a limit to that.”
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