Chevron warned of the coming oil shortage and its effects on the world's economies

The shortage of oil supplies will begin to appear around the world due to the closure of the Strait of Hormuz, through which 20% of the world's raw materials passed before the war between the United States and Iran. This was stated by the chairman of the board of directors and CEO of the oil company Chevron Mike Worth, he was quoted by Reuters.

According to Worth, because of the shortage, the world's economies will begin to slow down, primarily in Asia, as demand adjusts to the reduced supply. Europe is likely to be the next to suffer, the Chevron executive said. Already, the continent is "canceling flights and rearranging schedules because jet fuel is becoming very, very scarce," Worth said in an interview with Bloomberg TV.

"A number of Asian countries have introduced measures to reduce consumption because of fears that supplies could run out. Countries like Australia, which have shut down much of their refining capacity and are heavily reliant on imports, are taking action," the Chevron chief told Bloomberg TV.

There will be no fuel shortages in the U.S., but consumers will experience price increases, Worth warns. "The risk of oil supply disruptions in other parts of the world is much higher than in the U.S.," he said. And while the U.S. is the largest oil producer, it will not be able to meet all supply needs in the European and Asian markets, the top executive added.

The head of Chevron also expressed concern about the safety of shipping in the Strait of Hormuz in an interview with Bloomberg TV amid US President Donald Trump's idea to organize "escort" of ships by the US Navy. Trump has called it "Project Liberty." The US and Iran on Monday, Ma 4, exchanged strikes in the region, jeopardizing the truce in place between them. The UAE claimed missile fire from Iran for the first time in nearly a month.

"I have been in touch with our staff who manage our shipping assets in the region and we remain concerned about transit security. It looks as if there are still some issues that need to be resolved," Worth said.

Chevron and other major oil companies have been forced to cut production in the Middle East because of the conflict, and surpluses in commercial markets, sanctions-avoiding shadow fleet tankers, and national strategic reserves are now being actively absorbed, Worth added. "I've told people in the [Trump] administration that the buffer stocks in the system that keep supplies available to markets are shrinking. That creates additional upward pressure on prices, potentiallymorevolatility andgreaterrisks," he said.

Brent oil at the auction on May 4 rose in price by almost 6% and at the moment exceeded $115 per barrel. Quotes for the U.S. grade WTI, on the contrary, were cheaper by 1.4% - to less than $105 per barrel.

On the background of the growth of Brent price and increased tension between the USA and Iran, the American stock market has fallen. The blue-chip index Dow Jones Industrial Average fell the most - by 1.13%. The S&P 500 fell by 0.41% and the Nasdaq Composite by 0.19%. At the same time, the VIX index, known as the Wall Street Fear Index, rose 7.7% to 18.29 points. The psychological mark indicating high volatility is considered to be 20 points.

This article was AI-translated and verified by a human editor