Energy Secretary Chris Wright, a long-time apostle of fossil fuel expansion, issued a blunt directive to the world’s largest oil and gas producers on Monday: Produce more, and do it now.
The call came in Houston at the “Super Bowl” of energy conferences. Thousands of miles away, smoke rose over the Persian Gulf following weeks of U.S. and Israeli airstrikes on Iranian infrastructure.
The conflict has unleashed one of the biggest energy-supply shocks in modern history, with Brent crude trading at $101 to $103 a barrel Tuesday morning and average gas prices across the United States just under $4 a gallon, according to AAA.
But the White House’s push for higher output is meeting resistance from oil giants. Industry CEOs are warning that geopolitical instability has decoupled energy prices from physical supply and demand fundamentals, leaving them wary of long-term investments in a “fog of war.”
Speaking at S&P Global’s CERAWeek, Chevron CEO Mike Wirth warned that the global energy trade is instead operating on “scant information and perception.”
“They’re uncertain, they’re unpredictable. They’re volatile,” Wirth said, describing the whipsaw reaction of markets to the latest headlines.
He added that the physical supply disruptions caused by the Strait of Hormuz closure have yet to be fully reflected in current oil futures prices, suggesting the true economic pain has yet to hit.
After passing $112 a barrel on Friday, oil prices dropped Monday by more than 10 percent following an announcement by President Donald Trump that the U.S. and Iran had productive talks to end the war. Iran denied having talks with the White House.
The war has shut the Strait of Hormuz, where one-fifth of the world’s oil and gas supply transits, destroyed Iranian gas fields and caused long-term damage to key energy infrastructure in the Middle East. It’s also killed more than 2,000 people.
On Saturday, Trump escalated the stakes, giving Iran a 48-hour ultimatum to reopen the Strait or face strikes on its domestic power plants—a move environmental advocates warn could trigger unprecedented ecological disasters in the region. But on Monday the president extended that deadline until Friday.
Jarrod Agen, executive director of Trump’s National Energy Dominance Council, spent Monday evening defending the administration’s decision to strike Iran and touting steps the White House has taken to address the energy crisis: the five-day extension of Trump’s threat to strike Iran’s power plants, a waiver of a shipping law to allow more oil imports and the release of millions of barrels of oil from strategic reserves.
When asked by a Politico reporter if anyone had told Trump that striking Iran would certainly cause the Strait of Hormuz to close, Agen sidestepped the question and called Trump a master negotiator.
“Drill baby drill,” Agen said, is the administration’s weekly mantra as it meets with oil executives about ramping up production. “We haven’t heard any pushback on wanting to produce more.”
Agen pointed to two main pathways to increase production. The first is on the North Slope of Alaska, where crude can then be shipped to Asian markets, including U.S. ally Japan. The second is in Venezuela.
“Chevron has their oil production there,” Agen said. “They’re hitting record levels already. There’s more that they can ramp up.”
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Donate NowBut Wirth wasn’t the only executive expressing concern. Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company, warned via video that the “systemic” nature of the crisis will inevitably slow global growth and punish the world’s most vulnerable populations. TotalEnergies CEO Patrick Pouyanne was also blunt, stating that if the Strait remains blocked for more than three or four months, the world faces a crisis that will dwarf the 2022 energy shock following Russia’s invasion of Ukraine.
“We cannot have 20 percent of the crude oil which is exported globally stranded in the Gulf,” Pouyanne said.
Philippe Benoit, managing director at Global Infrastructure Advisory Services 2050, emphasized that predictability is the lifeblood of the oil industry.
“Peace tends to serve their corporate objectives better than the uncertainties of war,” Benoit said.
He pointed out that major U.S. firms, including ExxonMobil, have billions of dollars at stake in the Middle East—assets that are increasingly vulnerable. These risks turned into reality last week when Iranian missile strikes caused extensive damage to Qatar’s Ras Laffan liquid natural gas plants, where ExxonMobil has invested tens of billions of dollars.
Adding to the industry’s hesitation is the president’s rhetoric. Executives noted that Trump’s insistence that prices will “immediately drop” once the war ends acts as a disincentive to pour capital into expensive new drilling projects today.
Trump has also clawed back renewable energy subsidies and moved to thwart wind projects in the pipeline—energy sources that experts say could insulate the United States from oil and gas shocks. On Monday, the Trump administration said it agreed to pay TotalEnergies nearly $1 billion to shutter a planned wind farm in the Atlantic in exchange for the company investing the funds in new oil and gas projects in the United States.
“The president’s made it pretty clear he doesn’t want new wind projects,” Agen said, pointing to nuclear power as the ultimate “way to solve” the United States’ growing consumption of energy.
While the administration pivots toward fossil fuels, the economic pressures caused by soaring gas prices are intensifying for everyday people. Benoit noted that electric vehicle owners are currently weathering the volatility far better than those reliant on internal combustion engines.
“People driving EVs aren’t feeling the recent surge in oil prices as much as people who drive gasoline cars,” he said.
The financial sector is bracing for the worst. Goldman Sachs issued a stark warning on Monday, nearly doubling its oil price projections as the blockade of the Strait of Hormuz continues. The bank now expects Brent crude to average $110 through April—a 62 percent surge over last year’s average.
Analysts warned that if shipping remains at just 5 percent of normal capacity for 10 weeks, prices could surpass the 2008 record of $147 per barrel.
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