An Exxon executive warned Middle East supply disruptions could ripple beyond gas prices, affecting diesel, food, plastics and shipping.
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ExxonMobil is warning that global oil markets could be on the brink of a sharp and sudden price spike, with inventories sinking toward what one senior executive called “unheard of” levels amid ongoing geopolitical disruptions.
Neil Chapman, senior vice president for the Houston-based oil giant, made the comments Thursday during an investors conference. Chron obtained transcripts from his discussion, where Chapman noted the market impact of the Strait of Hormuz closure, one of the world’s most important oil transit routes, and ongoing disruptions tied to the war in the Middle East.
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“I think most people don’t really appreciate what’s happened,” Chapman said during the conference. “You take arguably 11 million or 12 million barrels a day of crude oil out of the global market. The market is about 100 million, 103 million, 104 million barrels a day. Normally, you’d see prices go through the roof.”
The inventory warning
So far, Chapman said, the price shock has been softened by a mix of oil inventories, strategic petroleum reserve releases and sanctioned crude already on the water entering the market.
But those buffers may not last much longer.
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“We’re approaching unheard of inventory levels,” Chapman said. “I mean, really, really low levels. You can debate whether that’s going to hit those really low levels in 2 weeks or 3 weeks. But once you get to that point, then you’ll see prices shoot up.”
Chapman said models suggest physical Brent crude could jump once inventories reach those extremely low levels.
“Once you get to that really low inventory level up to $150, $160, the models would tell you that,” he said. “And then what happens is when the price gets to a certain level, demand destruction brings it back into balance.”
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STRAIT OF HORMUZ, IRAN – MAY 16: Ships remain anchored on May 16, 2026 in the Strait of Hormuz near Larak Island, Iran. Negotiations between the U.S. and Iran over opening this critical waterway have largely stalled as the countries have rejected each other’s proposals to end the war that began when the U.S. and Israel attacked Iran on February 28. (Photo by Majid Saeedi/Getty Images)
Majid Saeedi/Getty Images
Brent futures for July delivery closed under $94 per barrel Thursday, according to CNBC, as investors watched for any signs of a potential settlement between the U.S. and Iran that could reopen the Strait of Hormuz.
Chapman was careful to say he was not trying to predict the exact timing.
“I don’t know whether it’s 2 to 3 weeks or 3 to 4 weeks,” he said. “Once you get to the minimum inventory levels and all-time low inventory levels, there’s only one way to go. That’s the situation.”
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What it means for Houston
For Houston, the warning carries extra weight. ExxonMobil recently moved its legal headquarters to Spring, and the region remains deeply tied to the oil, gas and petrochemical industries.
Chapman also warned that crude oil prices ripple far beyond the gas pump.
“Crude oil goes into virtually everything around us,” he said. “Fertilizers, it comes from crude oil and gas, food prices, they would reflect the absence or the lack, plastics, everything you see in the world is plastics.”
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Chapman added that delivery and trucking costs could also feel the strain, noting that “a lot of trucks around the country are running on diesel.”
Chron has reached out to ExxonMobil for additional comment, but has not heard back yet.
Still, Chapman said the timing remains difficult to forecast because any reopening of the strait would take time to rebalance global markets.
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“If the Strait of Hormuz opens tomorrow, the price doesn’t get up to this $150, but it is going to take time to rebalance the global markets for sure,” Chapman said. “The ships are all in the wrong locations.”