Chevron CEO Mike Wirth Talks Oil Prices, Hormuz, Venezuela

Summary

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Bloomberg Talks

Episode: Chevron CEO Mike Wirth Talks Oil Prices, Hormuz, Venezuela

Date: May 29, 2026
Host: John (Bloomberg), Lisa (Bloomberg)
Guest: Mike Wirth, CEO of Chevron

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Episode Overview

This episode features Chevron CEO Mike Wirth discussing the state of global oil markets amid ongoing closure of the Strait of Hormuz, Chevron’s outlook on oil prices and inventories, U.S. and international energy policy challenges, and the company’s positions on Venezuela and California’s energy landscape. The conversation offers firsthand insight into how a major oil executive views the interplay between geopolitics, market psychology, infrastructure constraints, and the energy transition, especially in light of recent disruptions and persistent uncertainties.

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Key Discussion Points & Insights

1. Oil Prices & the Strait of Hormuz

• Context: Crude prices remain lower than expected despite the Strait of Hormuz being closed for three months.
• Mike Wirth’s Take:
  • Current pricing reflects a widespread market belief that the conflict is close to resolution and oil flow will soon resume, keeping the "back end of the curve lower" than if the closure were expected to last.
  • Physical markets are tightening, inventories are being drawn down globally, and June and July will be critical months ([00:56]–[01:34]).
  • Some shortages have been observed in Asian markets, causing demand adjustments and rationing, though a crisis point has not been reached ([01:51]–[01:54]).

Notable Quote:

“Inventories draw. Demand for products around the world is still very strong. I think there’s this belief that the end is near ... that has kept the back end of the curve lower than it might otherwise have been.”
— Mike Wirth ([00:56])

2. Transit Tolls, Navigation, and Geopolitics

• On Paying Tolls Through Hormuz:
  • Chevron would not pay a toll for transit. Wirth emphasizes the international principle of free navigation through global waterways, noting that charging transit fees could set a dangerous precedent universally ([02:20]–[03:09]).
  • Reports exist of entities using cryptocurrency to circumvent restrictions, but Wirth stresses such measures are problematic.

Notable Quote:

“Freedom of navigation through international waterways is a very well established principle. Anything like [a transit fee] ... not just to energy products, but to all freight ... that’s not a principle I think most countries in the world would find acceptable.”
— Mike Wirth ([02:40])

3. Infrastructure & Alternative Routes

• Pipelines & Avoiding Chokepoints:
  • Some pipelines already exist (e.g., in Saudi Arabia and UAE), with further projects under way. However, countries like Iraq and Kuwait remain dependent on Hormuz.
  • There’s increased interest/investment in infrastructure to avoid geopolitical choke points ([03:40]–[04:32]).

4. Oil Market Cycles & Supply Gluts

• Market Psychology:
  • Price cycles are a repeating pattern — shortages lead to high prices, then oversupply and gluts as producers react, often belatedly ([04:57]–[05:40]).
  • Chevron avoids using the futures curve as a primary forecasting tool, relying instead on a range of internal scenarios ([05:52]–[06:27]).

Notable Quote:

“History says that shortages tend to be followed by gluts and high prices send a signal ... It’s why commodity markets are cyclical, they tend to overshoot.”
— Mike Wirth ([04:57])

5. Is "This Time Different"?

• Production Growth:
  • Chevron is increasing production 7–10% this year, above average demand growth (~1%) ([06:51]).
  • While each crisis has unique characteristics, Wirth cautions against assuming the commodity cycle won’t repeat itself ([06:51]–[07:52]).

Notable Quote:

“People say that every time, and often find themselves regretting having said that ... How commodity markets respond have a pattern ... that is remarkably repeatable.”
— Mike Wirth ([06:51])

6. Chevron in Venezuela

• Repayment & Investment:
  • Chevron is currently recouping old debt from Venezuela via an oil supply mechanism approved by US Treasury and Venezuelan authorities.
  • New investment is stalled until Venezuela clarifies fiscal terms; current tax/royalty rates make returns impossible ([07:58]–[09:24]).

Notable Quote:

“Right now, the amount of tax and royalty that’s paid doesn’t leave enough for an investor to get a return ... So there’s progress being made ... but we don’t have enough clarity right now.”
— Mike Wirth ([07:58])

7. Oil Price Scenarios & Strait Clearing

• Price Ranges:
  • Internal Chevron planning sees the annual price possibly matching December’s futures ($84) on the low end; "very high numbers" are possible if Hormuz remains closed ([09:24]–[09:50]).
• Reopening Hormuz:
  • Clearing 2,000 ships from the strait will take "weeks and weeks," with complex decisions and lingering security risks.
  • Ship owner willingness and safety, as well as damaged infrastructure and tank capacity, complicate any reopening ([09:55]–[11:26]).
  • Chevron currently has six ships trapped; ultimate decisions rest with third-party owners.

Notable Quote:

“It’s going to take months ... Shipowners have to be convinced that it’s safe ... This doesn’t happen overnight. This is going to be with us for some time.”
— Mike Wirth ([10:30]–[11:26])

• Security Situation:
  • There have been more vessel attacks than publicly reported; risk remains high ([12:17]–[12:38]).

Notable Quote:

“There have been vessels in transit that have suffered attacks ... more than what’s been heard in the press.”
— Mike Wirth ([12:17]–[12:26])

8. Gas Prices & California’s Energy Policies

• High California Prices:
  • Wirth attributes higher prices to decades of state policy: reduced refinery capacity, highest fees/taxes, and import dependencies ([13:23]–[14:31]).
  • Points to tight global markets amplifying the effect, as California has the highest U.S. prices partly due to conscious policy choices.
• Business Models (Costco Example):
  • Big retailers often price gas as a loss leader, leveraging memberships, while small station owners rely on higher fuel margins ([14:31]–[15:15]).

9. Chevron & U.S. Government Relations

• Focus of Attention:
  • Wirth spends more time in Washington than on the ground in the Permian due to increased political and regulatory engagement during market distress ([15:27]).

10. U.S. Inventories & Price Risks

• Distillate & Gasoline Shortages:
  • U.S. currently exporting record amounts of crude/products, which constrains domestic inventories.
  • This tightness, with refineries running at maximum, may soon impact U.S. fuel supply and prices outside of California as well, especially if global shortages persist ([16:21]–[17:27]).

Notable Quote:

“We’re exporting crude at record levels ... Inventories are low for diesel, for gasoline in the U.S. ... demand remains strong, prices are elevated, and there’s risk they go higher, and shortages that have now only really appeared in Asia could begin to show up in other parts of the world.”
— Mike Wirth ([16:21])

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Memorable Moments & Notable Quotes with Timestamps

• "The psychology of the market has been this is closer to the end rather than the beginning." — Mike Wirth ([00:56])
• "Freedom of navigation through international waterways is a very well established principle ..." — Mike Wirth ([02:40])
• "History says that shortages tend to be followed by gluts and high prices send a signal." — Mike Wirth ([04:57])
• "People say [this time is different] every time and often find themselves regretting having said that." — Mike Wirth ([06:51])
• "Right now, the amount of tax and royalty that’s paid doesn’t leave enough for an investor to get a return ..." — Mike Wirth ([07:58])
• "It’s going to take months ... Shipowners have to be convinced that it’s safe ... This doesn’t happen overnight." — Mike Wirth ([10:30])
• "There have been vessels ... that have suffered attacks, more than what’s been heard in the press." — Mike Wirth ([12:17])
• "California’s policies for two decades have been driving prices higher." — Mike Wirth ([13:33])
• "Inventories are low ... demand remains strong, prices are elevated, and there's risk they go higher ..." — Mike Wirth ([16:21])

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Important Timestamps

• Strait of Hormuz and oil pricing context: [00:26]–[01:34]
• Inventory drawdown and physical shortages: [01:29]–[01:54]
• Transit tolls & international waterways: [02:20]–[03:31]
• Pipelines and bypass infrastructure: [03:31]–[04:32]
• Market cycles and forecasting: [04:32]–[06:27]
• Chevron’s production, cycle patterns: [06:27]–[07:52]
• Chevron and Venezuela: [07:52]–[09:24]
• Oil price planning & risks: [09:24]–[10:30]
• Logistics of clearing Hormuz, risk and attacks: [10:30]–[12:31]
• California fuel price factors: [13:23]–[14:31]
• Gasoline retail models: [14:31]–[15:15]
• Chevron’s government engagement: [15:27]
• U.S. inventory and price risk: [16:21]–[17:27]

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Conclusion

This episode provided a clear-sighted, sometimes candid look at current global energy market tension and Chevron’s approach to pricing, supply disruption, and future investment, with Mike Wirth stressing the lingering risks around Hormuz, caution in Venezuela, and systemic drivers behind U.S. and Californian gasoline prices. The market may feel cyclical patterns again, but as global events unfold, vigilance is paramount.

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Transcript

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[Podcast Host]

Bloomberg Audio Studios Podcasts Radio News Crude on track,

[John]

at least for now, for its steepest monthly decline since 2020. Optimism building for a consumption of traffic through the Strait of Hormuz as energy producers are highlighting the risk of an extended closure. Chevron's been warning, quote, we will start to see physical shortages. The CEO Mike Worth, I'm very pleased to say, joins us in the studio. Mike, it's good to see you.

[Mike Worth]

Good to see you, John.

[John]

Welcome back to the program, sir. I get this question a lot. You're the expert. Help me answer it. Why is crude at 100 at 90 and not close to the 200? Given this straight's been shut for three months.

[Mike Worth]

You know, it's a little hard to explain. We really are seeing markets tightening. Inventories draw demand for products around the world still very strong. I think there's this belief, and we, you know, we're experiencing it again the last few days, that the end is near, the conflict is nearly resolved and and flow through the Strait will resume very quickly. And that has kept the back end of the curve lower than it might otherwise have been. And I think the psychology of the market has been this is closer to the end rather than the beginning.

[Lisa]

But what about the physical world? When will inventories be at the very bottom?

[Mike Worth]

Before long. We are steadily drawing inventories down on products, on crude in locations around the world. I think June and July are going to be critical months. And you can see the trajectory of these inventories in the data. And it's concerning.

[Lisa]

Do you see any physical shortages right now around the world?

[Mike Worth]

We do see some in some Asian markets and we've seen some, some rationing. We've seen work weeks, adjusted demand measures imposed in some of the countries in Asia. You know, markets are very efficient at moving products and barrels to where they're needed. And we haven't reached a crisis point yet. But the inertia in the system is very, very strong. And turning that is not easy.

[Lisa]

One of the main sticking points the US has when it comes to negotiating with Iran is this idea of the tolling. Would Chevron consider paying a toll?

[Mike Worth]

No, we wouldn't.

[Lisa]

Do you know how people are paying a toll?

[Mike Worth]

I've heard reports of people using cryptocurrency in various countries. I think the treasury has come out this week and sanctions. The new authority that has been put in place to oversee transit through the strait, it went from a toll to a navigation fee to something else. Navigation fee, A comp. I don't know enough about any of these things to say definitively. But look, freedom of navigation through international waterways is a very well established principle. And anything like this would begin to say that countries adjacent to an international waterway can charge some sort of a transit fee. There are many other places in the world where that principle could be applied, and not just to energy products, but to all freight moving through the Straits of Malacca, the Bosphorus. Pick your choke point. And so that's not a principle I think, that most countries in the world would find acceptable.

[Podcast Host]

How far are we away from having pipelines that connect some of these countries to the mainland and their production without having to traverse the strait at all?

[Mike Worth]

Well, there's a couple that exist now that you've, you've talked about in Saudi and the UAE. The UAE sanctioned a project last year which is about 50% complete, to get more of their production over to Fajira and outside of the strait. The so. So I think you'll see more of that, Lisa. The one opportunity there is countries like Iraq and Kuwait that are deeper up in the Gulf don't have access to those pipelines. And for them, the route could be through the north and ultimately then into the Mediterranean, maybe through Turkey, where we see a pipeline comes out of the Caspian Sea over into the Mediterranean in Turkey. And so I do think one of the responses to this will be infrastructure investments that will allow these energy flows to avoid this trade to Hormuz. And that's underway now. And I think you'll see that in the years that follow.

[Podcast Host]

We started the conversation talking about why oil prices aren't higher and you saying that we're getting close to breaking the bottoms of some of the inventory bins. And we were speaking just a moment ago with Alex Altman of Barclays, who said we actually could see a glut of oil in 6 to 12 months time. If there is a resolution here based on the production levels of so many different oil companies and countries. What's your take on that? Do you think that that's a feasible interpretation?

[Mike Worth]

Well, history says that shortages tend to be followed by gluts and high prices send a signal. And markets work, consumers consume less, producers produce more in response to a price signal. And there's a time lag in the way both of those manifest themselves in the market. And what has happened historically is about the time that the new supplies reach the market, demand may have turned down through conservation measures, economic slowdown, maybe a recession, and you can see those lines cross over and the price cycles down. It's why commodity markets are cyclical, is they tend to overshoot. And you know, history says when we get into one of these situations, that is somewhere out in the future.

[John]

What signal do you take from the futures curve? I'd love your reaction to that because so many people have pointed to the back end of the futures curve as a prediction of markets of where they think crude will be. How does an energy boss like yourself look at the futures curve?

[Mike Worth]

Not very frequently. It's not something we use for planning purposes. We do a certain amount of hedging in our business on commercial activity where you will use futures. But we don't look at futures curve as a prediction of future price. We do our own fundamental analysis on demand, supply, technology, policy, economic growth, and arrive at our own scenarios. And we don't use a point forecast or a curve. We use a range of scenarios. Prices are hard to predict in these markets, and so we don't anchor on a single price. We use a range of prices.

[Podcast Host]

What's fascinating is you were talking about how typically commodity markets tend to overshoot and then you get the glut just as demand falls off. Are we overshooting? Because what I keep hearing is that we're not overshooting. Actually, oil prices and the futures curve is remarkably low and that people keep consuming and frankly, people like yourself are not investing in more production right now. You're not increasing production dramatically to offset some of what's going on. So is this time different in terms of the commodity cycle?

[Mike Worth]

Well, first of all, we are increasing production. Our Production will grow 7 to 10% this year, which is a lot in a world where demand is growing 1% on average, and so there is investment in growth. Is this time different? People say that every time and often find themselves regretting having said that. This time is this is the circumstances here are things we haven't seen before. 20% of the world's energy production cut off for now nearly 100 days. A billion barrels that is not in the market that otherwise would have been in the market is not something that we've seen before. So that part of it is different. How commodity markets respond have a pattern that has been proven through different types of shocks to the system that is remarkably repeatable. Maybe not perfectly predictable, but it is something that you have to bear in mind when you're in this Business as you allocate capital and as you plan for your business is, you know, these patterns exist for a reason.

[Lisa]

When you allocate capital. I want to ask you about Venezuela. When will you put fresh dollars into the country?

[Mike Worth]

Yeah, we're, you know, currently operating under a system that's been approved by the U.S. treasury and the Venezuelan government to recover debt that we're owed. We made some loans to their state owned company many years ago and they weren't repaid. And so we set up a mechanism to ensure repayment oil flow to the US which is important for US Refiners. We're working our way through that and we'll recover the debt over the next year or so, the final portion of it. And then we need a new set of fiscal terms under which we would invest in the country. Right now, the amount of tax and royalty that's paid doesn't leave enough for an investor to get a return on their investment. The country has changed its approach. Hydrocarbon law has indicated a new range of taxes and royalties that would be applied to the energy sector, but they've not been specific about where in the range those would land. So there are negotiations underway, discussions even this week we had a team in Venezuela that had some discussions on this issue. I expect over the next short period of time we may see some clarity from them on specific values on corporate income tax, on a range of things on royalties and a how that might be applied. So there's progress being made to clarify the things that would be needed in order to make those investments. But we don't have enough clarity right now. We don't understand what the regime would look like. And so it's unlikely we would put capital to work until those things are clarified.

[John]

Inquiry minds want to know. I'm getting the feedback right now. So December's trading at 84. What is the Mike Worth Chevron price this year? What's the range in your scenario planning?

[Mike Worth]

Well, the range on the low end would probably get to that number. And on the high end, if we were to see an extended constraint on transit out of the Strait of Hormuz, the question is how high is high? You, you get to very high numbers.

[John]

So your low is actually where December is priced right now.

[Mike Worth]

Yeah, These are, these are all predicated on assumptions. Right. We don't, we don't tip into a recession. We don't have some other exogenous event. But yeah, it's going to take months, John, to clear ships out of the strait to make sure that the mines have been Cleared to establish to get 2,000 ships out. They don't all go out at once. You need weeks and weeks. Somebody's got to prioritize. Do bulk freighters go out first? Do container ships go out first? Do u. S. Allied ships go first or last? Iranians? 2000 ships. That decision unclear at this point.

[Lisa]

Wouldn't it be the fifth fleet?

[Mike Worth]

It's unclear at this point. So there needs to be a system to prioritize traffic. Shipowners have to be convinced that it's safe to transit through the strait. There need to be some sort of security measures, and then that's just to get ships out. You have to get ships in as well. And the tanks inside the gulf are full. That's why production is being slowed or stopped is because there's no place to put it. The ships are full, the tanks are full. So you need new ships to come back in. Ship owners have to be comfortable sending ships back in. After having ships trapped for months and crews trapped for months, they may or may not be willing to move all of their vessels back in. There's other routes now that are. Trading us to asia is a very heavily traded route. There's a lot of ships in that service, so it will take months. And then you. Then you start to clear out the. The inventories that are in tanks, which allows fields to restart, damage to be repaired. This doesn't happen overnight. This is going to be with us for some time.

[John]

I got to ask you, do you just sit here and say you first. How do you think about it?

[Mike Worth]

Well, we'd like to get our ships out. It's not a decision. The ship. We have six ships inside the strait right now with. With our cargoes. All of them are chartered, so they're owned by a third party. And we don't ultimately make the call. The ship owner decides whether or not he wants to put his vessel and his crew through the strait. And. And so that's a decision we provide advice on input to, but we can't make that decision. So it's a very complex set of decisions that need to be made to begin to get things moving again. And it will happen slowly. I would expect there'll be some stop and start to it. There still has been kinetic activity this week, some of which has been reported in the media, some of which has not. And. And so we see risks very real still in that journalist.

[John]

You can't say things what hasn't been reported, what's not been reported, what.

[Mike Worth]

Well, there have been. There have been vessels that have been in transit that have have suffered attacks

[John]

that more than what we've heard of in the press.

[Mike Worth]

Yes, our reports would indicate that.

[John]

What do they suggest? How frequent have those attacks been?

[Mike Worth]

They're maybe not every day, but there have been multiple incidents that have occurred.

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[John]

Mike, for the people of California, people waking up early this morning perhaps on the west coast and tuning into this program, what's your message to them about why gas prices are so much higher in their state compared to everybody else?

[Mike Worth]

Well, this is politicians gaslighting exciting about gas prices. The fact is California's policies for two decades have been driving prices higher. California has six refineries operating today. A little bit more than a year ago we had nine refined refining capacities down 17% in just the last year. California has the highest taxes and fees in the nation. California imports 60% of its crude oil, 25% of its diesel, 25, 20% of its gasoline, similar amounts of jet fuel. And we're in a situation where world energy markets are tight and so prices are going up everywhere. California has long been the highest priced state in the country because the policies have constrained supply and demand is continuing to be very robust in a state where supply is has been consciously constrained by policy.

[Lisa]

But how do some gasoline companies, stations like Costco keep actually lower prices though?

[Mike Worth]

Well, everybody's got a different business model. I think, you know, a hyper marketer like Costco has things they use as almost a loss leader to bring traffic in and can operate on a very small margin because you go to the big box and that's where the revenue is. And the real P and L comes through the subscriptions and the memberships. A small service station owner doesn't have the benefit of that. They have to make a margin on the fuel that they sell and, and maybe some ancillary, ancillary goods. So retailers all have different business models and you know, you see that in the marketplace and they meet different customer needs. You see a range of those prices.

[Lisa]

I'm sure Chevron is going to be on the mind of Gavin Newsom as he looks for a 2028 presidential run. But it's also been, I mean, you've been front and center when it comes to this administration as well. Do you spend more time in Washington

[Mike Worth]

or the Permian lately? Probably in Washington. I like being in the Permian, but, you know, my job requires some interaction with, you know, elected officials in the Senate and the House, the administration. And during a time of, you know, extreme distress in energy markets, there's a lot of dialogue that goes on in Washington, D.C. so hopefully I'll get to the Permian in the second half of the year.

[Podcast Host]

Yeah, which would require gasoline prices going down. And recently they've been remaining at this relatively high level, though they have dipped just a bit. You talk about how we could end up seeing shortages in the next few weeks, even in the United States, looking right now at distillate fuel inventories, the lowest levels here since 2003, a pretty shocking number. How much could you foresee gasoline prices? Is the United States rising outside of California because of just simply shortages that you're seeing on the ground?

[Mike Worth]

Yeah. Well, right now the US has come to the rescue of some of our allies around the world. We're exporting crude at record levels. We're exporting products to Europe in particular. And, and so what that means is products that might otherwise be used in the US Are being highly valued elsewhere. And so we're seeing flows in that direction. Inventories are low for, for diesel, for gasoline in the US and we're moving into a period of time which seasonally says demand is likely to rise. The refineries in the country are running as hard as they possibly can. They're all near maximum utilization. And so the market is tight. And this is the reason why I've talked about concerns about upward pressure on prices because you can get away from the crude forward curve and, and get to diesel inventories, gasoline inventories, and the prices of those products which are really the products that are consumed. And we're in a period where inventories are tight, demand remains strong, prices are elevated, and there's, there's risk, they go higher, and shortages that have now only really appeared in Asia could begin to show up in other parts of the world.

[John]

Mike, you're one of the very best clinic as always, we appreciate your time. Thank you, sir. Thank you. Mike Worth there. The Chevron CEO, Ryan Reynolds here from

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