The world’s top energy executives return to Houston today as the escalating US-Israeli war on Iran has become a nightmare for energy markets, as unprecedented attacks on infrastructure and shipping disruptions sent global oil prices soaring while governments scrambled to fight inflation and avoid recessions.
Global oil prices jumped this week, hitting almost $120, levels not seen since Russia’s war on Ukraine disrupted markets in 2022.
Industry experts and analysts expect prices to remain elevated long after combat operations end. They say it will take years for the region to recover from the upheaval caused by air strikes and Iran’s virtual closure of the Strait of Hormuz, conduit for 20 per cent of the world’s oil and liquefied natural gas.
For instance, Qatar said a damaged liquefied natural gas facility will take years to repair. At this year’s CERAWeek conference, more than 10,000 attendees from more than 80 countries will also focus on Venezuela after the US captured President Nicolas Maduro in January and eased sanctions on the South American Opec member nation in an effort to kick-start its oil industry and boost investment.
“The geopolitics around energy has never flown as thick and as fast as it’s flowing right now. ... the Gulf situation plus Venezuela, plus all the knock-on issues around Russia, it really is an extraordinary moment,” said Geoffrey Pyatt, who was assistant secretary of state for energy resources under former President Joe Biden and is now a senior managing director at US consultancy McLarty Associates.
The five-day event comes as Iran’s effective closure of the Strait of Hormuz has forced Middle Eastern producers to shut in much of their output. Tehran has also struck oil and gas targets in the Gulf, after Israel struck one of its large gas fields last week.
Consuming nations have mostly given up hope that disruptions would be short-lived. Many refineries and petrochemical companies, mostly in Asia, have cut runs, shut units or declared force majeure as the conflict disrupts crude and feedstock exports from the Middle East. In the US, diesel prices have topped $5 a gallon for the first time since 2022, as petrol pump prices have moved towards $4 a gallon. This has raised the political stakes for President Donald Trump and his Republican Party ahead of midterm elections in November.
CERAWeek participants and speakers include US Energy Secretary Chris Wright, Interior Secretary Doug Burgum, ministers from Opec+ members Nigeria and the UAE, as well as CEOs of Aramco, Chevron, Shell , TotalEnergies and the Abu Dhabi National Oil Company.
“There has been more upheaval and disruption in markets than ever before...This is a war that’s been brewing for almost half a century, and the concerns about the Gulf have been prominent for half a century. But now it’s happening,” Dan Yergin, Pulitzer Prize-winning author and vice chairman of CERAWeek conference organiser S&P Global, said in an interview.
Security and affordability will be the defining words for CERAWeek, Yergin said.
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