(AFP) – A top US official in President Donald Trump’s government sought to reassure fears about the oil market Monday as war raged on in the Middle East, but industry leaders remain wary. US Energy Secretary Chris Wright told the annual CERAWeek conference in Houston that disruption to global energy flows is “temporary,” as costs surged after US-Israeli strikes on Iran prompted Tehran’s retaliation that virtually blocked the Strait of Hormuz.
Wright said Washington has adopted “pragmatic solutions,” such as helping oil flow to Asian refineries. The United States also started releasing oil from its strategic reserves on Friday. “But these are mitigants of a situation that’s temporary,” he stressed to a packed ballroom. His comments came as energy industry leaders converged in Texas this week under the cloud of oil and gas supply disruptions from the war launched by the United States and Israel against Iran in late February. More than 10,000 attendees are expected for CERAWeek, the spring gathering that has taken on unexpected importance as fuel prices rocketed after the war began.
Wright stated that the United States would be able to release up to 1.5 million barrels of oil a day, and this could get close to three million barrels. Attacks on critical energy facilities in Iran, Qatar, and other Gulf countries have exacerbated global supply problems. Oil prices tumbled Monday as Trump ordered a halt on strikes targeting Iranian infrastructure following “very good” talks. However, Tehran denied that negotiations were underway.
Wright told CNBC on Monday that even though the world is undergoing a “short-term period of disruption” now, “the long-term benefits will be enormous.”
– ‘Economic terrorism’ –
Separately, the chief of UAE state energy company ADNOC slammed Tehran’s actions to effectively block the Strait of Hormuz, a key waterway for global energy supplies. “Weaponizing the Strait of Hormuz is not an act of aggression against one nation,” Sultan Ahmed Al Jaber said in virtual remarks to the conference. “It’s economic terrorism against every nation. And no country should be allowed to hold Hormuz hostage,” he added. TotalEnergies chief Patrick Pouyanne expects “very high” liquefied natural gas prices by the summer, when gas storage in Europe is being refilled, if the strait is not reopened.
US energy giant Chevron’s chief executive Mike Wirth warned that oil prices have yet to fully factor in the fallout from the blockade. “In particular, Asia is facing some real concerns about supply,” he said, citing government measures to conserve stocks. Even after the war ends, it will take time to rebuild inventories, he added.
– Wind power projects –
Outside the conference venue, dozens of demonstrators pushed back on fossil fuel reliance. Chloe Torres of the Texas Campaign for the Environment said her community in Corpus Christi has been hit by “hyper-industrialization” from the fossil fuel and petrochemical industry. “We are rapidly running out of water,” she said, adding that industrial demand has strained resources.
At the event, the Trump administration reached a deal with French energy giant TotalEnergies in which it would pay almost $1 billion to end its US offshore wind farm projects, the Interior Department said. The $928 million reimbursement, which was what TotalEnergies paid for project leases, would instead be invested in US oil and gas projects. “We’re partnering with TotalEnergies to unleash nearly $1 billion” tied up in lease deposits, said Interior Secretary Doug Burgum.
The weeklong conference gathers experts from industry, finance, government, and academia to discuss energy and other topics including trade and artificial intelligence. Besides the war, much of the attention this year again centers on the profound reorientation of US energy and environmental policy under Trump. This year’s conference also features a plenary event with Venezuelan opposition leader and Nobel Peace Prize laureate Maria Corina Machado, who is due to speak Tuesday.
– Nina ISENI with Beiyi SEOW and Asad HASHIM in Washington.
© 2024 AFP
