Exxon Mobil CEO expects higher oil prices due to Iran war: ‘The market hasn’t seen the full impact’

In this article XOM Follow your favorite stocks CREATE FREE ACCOUNT watch now VIDEO 7:23 07:23 Exxon Mobil CEO Darren Woods: Recent changes have made us more resilient to operational disruptions Squawk Box Exxon Mobil CEO Darren Woods warned Friday that the market has not absorbed the full impact of the unprecedented oil supply disruption triggered by the Iran war and the closure of the Strait of Hormuz. The disruption has been mitigated by the large number of loaded oil tankers that were in transit during the first month of the war, Woods told investors on Exxon's first-quarter earnings call. Strategic petroleum reserves have also been released and commercial inventories drawn down, the CEO said. One of these supply sources will become exhausted as the conflict goes on, Woods said. Oil prices will then increase as the strait remains closed, he said. "It's obvious to most that if you look at the unprecedented disruption in the world supply of oil and natural gas, the market hasn't seen the full impact of that yet," Woods said. "There's more to come if the strait remains closed," the CEO said. Oil futures trading has been volatile during the war. Prices have soared on the risk of escalation and then plunged on hopes for peace before repeating the cycle. U.S. crude oil fell more than 3% Friday to $101.38 per barrel, while international benchmark Brent was down about 2% to $108. These prices are more consistent with historic levels over the past decade rather than the scale of the disruption in the Middle East, Woods said. Woods expects oil flows from the Persian Gulf to normalize in a month or two after the strait reopens. Tankers need to be respositioned, the supply blacklog needs to be worked through, and it takes time for the vessels to reach their destinations, the CEO said. Governments and industry will need to refill their strategic reserves and commercial inventories if stockpiles are depleted when the conflict ends, Woods said. This will bring more demand to t...