Chairman & Chief Executive Officer, Chevron Corp
Chevron CEO Mike Wirth Talks Gas Prices and Oil Markets on Bloomberg Surveillance
Chevron Chairman and CEO Mike Wirth joins Bloomberg Surveillance to explain what’s driving gas prices and oil markets today.
From global events affecting supply to how energy moves across markets, he breaks down the forces that shape pricing — and how Chevron uses its own analysis of supply, demand, and market signals to help deliver reliable energy to customers and allies worldwide.
Watch the full interview on Bloomberg.com: https://www.bloomberg.com/news/videos...
About Michael Wirth
Chevron chairman and CEO Mike Wirth has said that global oil markets are tightening and that the closure of the Strait of Hormuz has placed the global energy system under "extreme stress." In multiple interviews in April, May, and June 2026, Wirth stated that about 20% of the world's oil and LNG supply typically transits the strait and that its disruption has drawn down inventories and reduced the system's "shock absorbers." He warned that physical shortages, which he said had already appeared in Asia, could spread to other regions, and that US refineries were running at near-maximum utilization. Wirth also said that the US was exporting crude and refined products at record levels, which he described as helping allies but also diverting supply that might otherwise be used domestically. Wirth has discussed Chevron's operational response, stating that the company planned to grow global production by 7 to 10% in 2026, a rate he said exceeded global demand growth of about 2%. He noted that Chevron's US production had exceeded 2 million barrels per day for three consecutive quarters. Regarding Venezuela, Wirth said Chevron had increased production there by over 200,000 barrels per day since 2022 under a debt-recovery mechanism, but that further investment required clarity on new fiscal terms from the Venezuelan government. On California, Wirth said that state policies had driven refinery closures and made the state more reliant on imports, which he described as creating vulnerabilities. He also said that the laws of physics, thermodynamics, and economics are "stubborn" and that markets are efficient at finding the best application for different energy technologies.
Transcript (44 segments)
✨ AI-enhanced transcript with speaker attribution
I
Interviewer0:00
The CEO, Mike Worth, I'm very pleased to say, joins us in the studio. Mike, it's good to see you.
M
Michael Wirth0:04
Good to see you.
I
Interviewer0:04
John, welcome back to the program, Sir. I get this question a lot. You're the expert. Help me answer it. Why is crude at 90 to 100 and not close to 200 given this strait has been shut for three months?
M
Michael Wirth0:16
You know, it's a little hard to explain. We really are seeing markets tighten, inventories draw, demand for products around the world still very strong. I think there's this belief and we're experiencing it again the last few days that the end is near, the conflict is nearly resolved and flow through the strait will resume very quickly. And that has kept the back end of the curve lower than it might otherwise have been. And I think the psychology of the market has been this is closer to the end rather than the beginning.
I
Interviewer0:48
But what about the physical world? When will inventories be at the very bottom before long?
M
Michael Wirth0:55
We are steadily drawing inventories down on products, on crude in locations around the world. I think June and July are going to be critical months. And you can see the trajectory of these inventories in the data and it's concerning.
I
Interviewer1:11
Do you see any physical shortages right now around the world?
M
Michael Wirth1:14
We do see some in some Asian markets and we've seen some rationing, we've seen work weeks adjusted, other demand measures imposed in some of the countries in Asia. You know, markets are very efficient at moving products and barrels to where they're needed. And we haven't reached a crisis point yet, but the inertia in the system is very, very strong and turning that is not easy.
I
Interviewer1:38
Many sticking points the US has when it comes to negotiating with Iran is this idea of the tolling. Would Chevron consider paying a toll?
M
Michael Wirth1:48
No, we wouldn't.
I
Interviewer1:50
Do you know how people are paying a toll? I've heard reports of people using cryptocurrency in various countries.
M
Michael Wirth1:58
I think the Treasury has come out this week and sanctioned the new authority that has been put in place to oversee transit through the strait. It went from a toll to a navigation fee to something else fee. I don't know enough about any of these things to say definitively. But look, freedom of navigation through international waterways is a very well established principle. And anything like this would begin to say that countries adjacent to an international waterway can charge some sort of a transit fee. There are many other places in the world where that principle could be applied, and not just to energy products, but to all freight moving through the Straits of Malacca, the Bosphorus, pick your choke point. And so that's not a principle I think that most countries in the world would find acceptable.
L
Lisa2:51
How far are we away from having pipelines that connect some of these countries, the mainland and their production without having to traverse the Strait at all?
M
Michael Wirth2:59
Well, there's a couple that exist now that you've talked about in Saudi and the UAE. The UAE sanctioned a project last year, which is about 50% complete to get more of their production over to Fujairah and outside of the Strait. So I think you will see more of that, Lisa. The one opportunity there is countries like Iraq and Kuwait that are deeper up in the Gulf don't have access to those pipelines. And for them, the route could be through the north and ultimately then into the Mediterranean, maybe through Turkey where we see a pipeline comes out of Caspian Sea over into the Mediterranean in Turkey. And so I do think one of the responses to this will be infrastructure investments that will allow these energy flows to avoid the Strait of Hormuz, and that's underway now. And I think you'll see that in the years that follow.
I
Interviewer3:51
We started the conversation talking about why oil prices aren't higher and you're saying that we're getting close to breaking the bottoms of some of the inventory bins. And we were speaking just a moment ago with Alex Altman at Barclays, who said we actually could see a glut of oil in 6 to 12 months time if there is a resolution here based on the production levels of so many different oil companies and countries. What's your take on that? Do you think that that's a feasible interpretation?
M
Michael Wirth4:16
Well, history says that shortages tend to be followed by gluts and high prices send a signal and markets work. Consumers consume less, producers produce more in response to a price signal. And there's a time lag in the way both of those manifest themselves in the market. And what has happened historically is about the time that the new supplies reach the market, demand may have turned down through conservation measures, economic slowdown, maybe a recession. And you can see those lines crossover and the price cycles down. It's why commodity markets are cyclical is they tend to overshoot. And you know, history says when we get into one of these situations that is somewhere out in the future.
I
Interviewer5:00
What signal do you take from the futures curve? I'd love your reaction to that because so many people have pointed to the back end of the futures curve as a prediction of markets of where they think crude will be. How does an energy boss like yourself look at the futures curve?
M
Michael Wirth5:12
Not very frequently. It's not something we use for planning purposes. We do a certain amount of hedging in our business on commercial activity where you will use futures. But we don't look at futures curve as a prediction of future price. We do our own fundamental analysis on demand, supply, technology, policy, economic growth and arrive at our own scenarios. And we don't use a point forecast or a curve. We use a range of scenarios. Prices are hard to predict in these markets, and so we don't anchor on a single price. We use a range of prices.
I
Interviewer5:46
What's fascinating is you were talking about how typically commodity markets tend to overshoot. And then you get the glut just as demand falls off. Are we overshooting? Because what I keep hearing is that we're not overshooting, that actually oil prices and the futures curve is remarkably low and that people keep consuming. And frankly, people like yourself are not investing in more production right now. You're not increasing production dramatically to offset some of what's going on. So is this time different in terms of the commodity cycle?
M
Michael Wirth6:11
Well, first of all, we are increasing production. Our production grows 7 to 10% this year, which is a lot in a world where demand is growing 1% on average. And so there is investment in growth. Is this time different? You know, people say that every time and often find themselves regretting having said that this time is the circumstances. Here are things we haven't seen before. The 20% of the world's energy production cut off for now nearly 100 days, a billion barrels that is not in the market that otherwise would have been in the market is not something that we've seen before. So that part of it is different. How commodity markets respond have a pattern that has been proven through different types of shocks to the system that is remarkably repeatable, maybe not perfectly predictable, but it is something that you have to bear in mind when you're in this business as you allocate capital and as you plan for your business is, you know, these patterns exist for a reason when you allocate capital.
I
Interviewer7:13
I wanted to ask you about Venezuela. When will you put fresh dollars into the country?
M
Michael Wirth7:18
Yeah. We're, you know, currently operating under a system that's been approved by the US Treasury and the Venezuelan government to recover debt that we're owed. We made some loans to their state owned company many years ago and they weren't repaid. And so we set up a mechanism to ensure repayment oil flows to the US, which is important for US refiners. We're working our way through that and we'll recover the debt over the next year or so, the final portion of it and then we need a new set of fiscal terms under which we would invest in the country. Right now, the amount of tax and royalty that's paid doesn't leave enough for an investor to get a return on their investments. The country has changed its hydrocarbon law, has indicated a new range of taxes and royalties that would be applied to the energy sector, but they've not been specific about where in the range those would land. So there are negotiations underway, discussions even this week we had a team in Venezuela that had some discussions on this issue. I expect over the next short period of time, we may see some clarity from them on specific values, on corporate income tax, on a range of things, on royalties and how that might be applied. So there's progress being made to clarify the things that would be needed in order to make those investments. But we don't have enough clarity right now. We don't understand what the regime would look like. And so it's unlikely we would put capital to work until those things are clarified.
J
John8:44
Inquiring might want to know. I'm getting the feedback right now. So December's trying to get 84. What is the Mike Worth Chevron price this year? What's the range in your scenario planning?
M
Michael Wirth8:54
Well, the range on the low end would probably get to that number and on the high end if we were to see an extended constraint on transit out of the Strait of Hormuz. The question is how high is high? You get to very high numbers.
J
John9:10
So your low is actually where December is priced right now.
M
Michael Wirth9:14
Yeah. And these are all predicated assumptions, right? We don't move, we don't tip into a recession. We don't have some other exogenous event. But yeah, it's going to take months, John, to clear ships out of the Strait to make sure that the mines have been cleared, to establish, to get 2000 ships out. They don't all go out at once. You need weeks and weeks. Somebody's got to prioritize to bulk freighters go out first to container ships go out first. Do US allied ships go out first or last? Iranian 2000 ships unclear at this point.
I
Interviewer9:49
Wouldn't it be the Fifth Fleet?
M
Michael Wirth9:51
It's unclear at this point. So there needs to be a system to prioritize traffic. Ship owners have to be convinced that it's safe to transit through the Strait. There need to be some sort of security measures. And then that's just to get ships out. You have to get ships in as well and in the tanks inside the gulf are full. That's why production is being slowed or stopped is because there's no place to put it. The ships are full of the tanks are full, so you need new ships to come back in. Ship owners have to be comfortable sending ships back in after having ships trapped for months and crews trapped for months. They may or may not be willing to move all of their vessels back in. There's other routes now that are trading US to Asia is a very heavily traded route. There's a lot of ships in that service. So it will take months. And then you start to clear out the inventories that are in tanks, which allows fields to restart damage to be repaired. This doesn't happen overnight. And so this is going to be with us for some time.
I
Interviewer10:46
I've got to ask you, do you just sit here and say you first, how do you think about it?
M
Michael Wirth10:51
Well, we'd like to get our ships out. It's not a decision. The ship, we have 6 ships inside the strait right now with our cargoes. All of them are chartered. So they're owned by a third party and we don't ultimately make the call. The ship owner decides whether or not he wants to put his vessel and his crew through the strait and so that's a decision. We provide advice on input too, but we can't make that decision. So it's a very complex set of decisions that need to be made to begin to get things moving again. And it will happen slowly. I would expect there'll be some stop and start to it. There still has been kinetic activity this week, some of which has been reported in the media, some of which has not. And so we see risks very real still in that.
I
Interviewer11:32
What hasn't been reported, what's not been reported? What are you hearing?
M
Michael Wirth11:36
Well, there have been vessels that have been in transit that have suffered attacks more than what we've heard of in the press. Yes, our reports would indicate that.
I
Interviewer11:48
What did they suggest? How frequent have those attacks been?
M
Michael Wirth11:50
They're maybe not every day, but there have been multiple incidents that have occurred.
I
Interviewer11:58
More on that in the commercial break. Mike Worth, thank you, Sir. Appreciate this. Chevron CEO is going to stick with us. We'll have more on that in just a moment.
Mike, for the people of California, people waking up early this morning perhaps on the West Coast and tuning into this program, what's your message to them about why gas prices are so much higher in their state compared to everybody else?
M
Michael Wirth12:14
Well, this is politicians gaslighting about gas prices. The fact is, California's policies for two decades have been driving prices higher. California has 6 refineries operating today, a little bit more. A year ago we had 9, refining capacities down 17% in just the last year. California has the highest taxes and fees in the nation. California imports 60% of its crude oil, 25% of its diesel, 20% of its gasoline, similar amounts of jet fuel. And we're in a situation where world energy markets are tight and so prices are going up everywhere. California has long been the highest price state in the country because the policies have constrained supply and demand is continuing to be very robust in a state where supply has been consciously constrained by policy.
I
Interviewer13:13
But how do some gasoline companies like Costco keep actually lower prices though?
M
Michael Wirth13:19
Well, everybody's got a different business model. I think. You know, a hyper marketer like a Costco has things they use as almost a loss leader to bring traffic in and can operate on a very small margin because you go to the big box and that's where the revenue is. And the real P&L comes through the subscriptions and the memberships. A small service station owner doesn't have the benefit of that. They have to make a margin on the fuel that they sell and maybe some ancillary goods. So retailers all have different business models and you know, you see that in the marketplace and they meet different customer needs. So you see a range of those prices.
I
Interviewer13:56
I'm sure Chevron is going to be on the mind of Gavin Newsom as he looks for a 2028 presidential run. But it's also been, I mean, you've been front and center when it comes to this administration as well. Do you spend more time in Washington or the Permian lately?
M
Michael Wirth14:11
Probably in Washington. I like being in the Permian. But I, you know, my job requires some interaction with, you know, elected officials in the Senate and the House, the administration. And during a time of, you know, extreme distress in energy markets, there's a lot of dialogue that goes on in Washington, DC. So hopefully I'll get to the Permian of the second-half of the year.
I
Interviewer14:38
Yeah, which would require gasoline prices going down. And recently, they've been remaining at this relatively high level, although they have dipped just a bit. You talk about how we could end up seeing shortages in the next few weeks, even in the United States. Looking right now at distillate fuel inventories, the lowest levels here since 2003, a pretty shocking number. How much could you foresee gasoline prices in the United States rising outside of California because of just simply shortages that you're seeing on the ground?
M
Michael Wirth15:02
Yeah. Well, right now the US has come to the rescue of some of our allies around the world. We're exporting crude at record levels. We're exporting products to Europe in particular. And so what that means is products that might otherwise be used in the US are being highly valued elsewhere. And so we're seeing flows in that direction. Inventories are low for diesel, for gasoline in the US and we're moving into a period of time which seasonally says demand is likely to rise. The refineries in the country are running as hard as they possibly can. They're all near maximum utilization. And so the market is tight. And this is the reason why I've talked about concerns about upward pressure on prices because you can get away from the crude forward curve and get to diesel inventories, gasoline inventories and the prices of those products, which are really the products that are consumed. And we're in a period where inventories are tight, demand remains strong, prices are elevated and there's risk they go higher and shortages that have now only really appeared in Asia could begin to show up in other parts of the world.
I
Interviewer16:08
Mike, you're one of the very best in the clinic. As always, we appreciate your time. Thank you, Sir. Thank you, Mike.