Media: Fuel crisis hits as Hormuz disruption drains global oil buffers

American oil executives are warning that a global fuel crisis has arrived after more than six months of disruptions linked to the prolonged closure of the Strait of Hormuz, with commercial fuel stocks declining and strategic crude reserves offering increasingly limited relief, The Wall Street Journal reports.

A series of attacks has further tightened the market. Last week, strikes shut down a key Saudi Arabian crude pipeline that bypasses the Strait, removing at least 2.5 million barrels per day from an already constrained global market, analysts estimate.

“All these mechanisms helped to mitigate the price and supply risk,” Chevron Chief Executive Mike Wirth said at an energy conference in Austin, Texas. “Those have largely now played out, and we don’t have nearly the buffers in the system that we did when it began.”

Wirth said oil prices could remain elevated, adding: “I wish I could tell you that I saw some reason why things would ease, but it’s difficult right now to see that happen.”

Energy advisers have warned that without a resolution to the conflict with Iran, the situation could spiral further. Diesel prices have reached a record $6.23 a gallon, while gasoline prices have climbed back to $4.32 after falling below $4 earlier this summer.

The Trump administration has repeatedly described the disruption as temporary and pledged to bring down fuel prices. Interior Secretary Doug Burgum said that “the prices in the prior administration were this high anyway,” blaming former President Joe Biden’s energy policies.

“If you want to write about the prices, make sure you include the word ‘temporary’ because this is a temporary disruption,” Burgum told reporters.

Washington is seeking to ease the pressure by boosting oil production in Venezuela and increasing US refining capacity. However, energy executives remain concerned as attacks on oil tankers and infrastructure continue across the region.

US crude prices have risen 19% over the past three weeks to around $101 a barrel. China has also resumed larger purchases from international suppliers after relying heavily on domestic crude stockpiles.

Meanwhile, diesel supplies remain particularly tight amid refinery outages and rising seasonal demand. “Diesel has no easy solution,” said Dan Pickering, founder of Pickering Energy Partners.

By Vafa Guliyeva