Chevron CEO Mike Wirth says Ukraine war changed the energy market

This article was last updated on March 7, 2023

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Chevron CEO Mike Wirth says Ukraine war changed the energy market

According to Chevron Corp CEO Mike Wirth, the natural gas market has been fundamentally changed for the long term by Russia’s invasion of Ukraine more than the oil market. The conflict in Ukraine and the resulting Western sanctions have disrupted global oil and gas markets, causing Europe to move away from dependence on Russian gas supplies, which is not likely to change in the future.

Wirth stated at the CERAWeek energy conference that if an attack disabled the Nord Stream pipeline from Russia to Europe, the changes would be long-lasting. “Gas markets, I think, are structurally changed for the longest,” he said.

Despite this, Russian oil is still reaching the market, albeit at varying costs, as ships travel longer distances to deliver Russian crude and fuel to countries that have not imposed sanctions. This has made the oil market and logistics tight and susceptible to any unforeseen supply disruptions.

Wirth added, “There’s not a lot of swing capacity, there’s not a lot of inventory capacity. There are now a lot of constraints… an unexpected event today would create a different balance.”

He also stated that one of the greatest challenges of all time is maintaining secure and affordable supplies while managing the energy transition to the low-carbon industry of the future. According to Wirth, a disorderly energy transition could be “painful and chaotic.” Therefore, caution must be exercised in turning off system A prematurely and depending on a system that has not yet been developed and proven.