Industry executives: An "oil crisis" has arrived! The war with Iran shows no sign of ending, and the situation risks spiraling out of control.

U.S. oil industry executives have warned that the energy market’s buffer mechanisms have largely failed as commercial inventories continue to deplete and strategic reserves dwindle, while the protracted conflict with Iran risks spiraling out of control.

On September 11, Chevron CEO Mike Wirth stated at an energy conference in Austin, Texas, that the mechanisms for maintaining market stability have largely been exhausted. Wirth said:

All these mechanisms have helped mitigate price and supply risks, but they are now largely exhausted, and the buffer space in our system has been significantly reduced compared to when the conflict began.

He added that oil price movements are difficult to predict, but the prospect of a rapid price decline in the current situation is not optimistic. Wirth stated:

I hope to tell you that I see some reasons for a de-escalation of the situation, but it is indeed difficult to see that possibility at the moment.

Global commercial fuel inventories have declined for more than six consecutive months, leaving little room for further use of strategic crude oil reserves. Last week, a key Saudi Arabian oil pipeline bypassing the Strait of Hormuz was attacked, and analysts estimate that approximately 2.5 million barrels per day of crude oil were trapped outside the already strained global market.

U.S. crude oil prices have surged 19% in the past three weeks and are currently trading around $102 a barrel; diesel retail prices have climbed to a record $6.23 a gallon, and gasoline prices have rebounded to $4.32 after briefly falling below $4 this summer.

The Trump administration insists the market disruption is temporary. U.S. Interior Secretary Doug Burgum said Monday at the G-20 event in Houston that the current rise in oil prices is a "temporary disturbance" and dismissed speculation that the U.S. is considering banning refined petroleum product exports.

However, this statement differs significantly from the assessments of oil industry executives, who are increasingly worried about the direction of the situation.

The war stalemate leaves the energy market with few options.

A senior energy consultant pointed out that with no signs of a resolution to the Iran war, the situation risks spiraling out of control.

Wil VanLoh, founder and CEO of Quantum Capital Group, stated at the Austin conference that the negotiating advantage usually belongs to the party with time and patience. He pointed out that Iran is "willing to endure pain, and its people have suffered for decades," suggesting that Tehran has a natural psychological advantage in a protracted war.

Dan Pickering, founder of investment firm Pickering Energy Partners, said that while Trump had previously stated the war would continue until the November midterm elections , investors generally believe the conflict will last much longer. Pickering stated:

That was a sign that the war would drag on.

Trump has pledged to exert economic pressure on Iran and ruled out the possibility of ground military intervention. Meanwhile, Iran continues to attack oil tankers transiting the Strait of Hormuz, even though the Trump administration previously claimed to have secretly escorted several ships safely through the waterway.

The White House insists on a "temporary" approach and rejects the export ban.

Despite market and industry anxiety, the Trump administration maintained that the situation was under control.

At an event in Houston, Burgum stated that former President Biden "pursued an energy-cutting policy and closed refineries," and that the current high oil prices would have been the norm had it not been for a change of administration; the current price increase is only temporary, adding, "If you're going to write about oil prices, be sure to include the word 'temporary.'"

He also explicitly ruled out the possibility of banning the export of refined petroleum products such as diesel, stating that such a move would not effectively lower domestic prices. Burgum stated:

We will do anything to help lower domestic prices, but we will also remain rational and not rely on the idea that stopping exports will magically solve the problem.

In the current crisis, the diesel market is facing particularly severe pressure.

According to a previous report by The Wall Street Journal, the CEOs of the three largest U.S. oil companies, ExxonMobil, Chevron, and ConocoPhillips, warned Trump administration officials, including Burgum and Energy Secretary Chris Wright, as early as March of this year that a prolonged closure of the Strait of Hormuz could lead to a severe shortage of refined petroleum products such as diesel.

Pickering pointed out that the conflict in the Middle East and the situation in Russia have damaged refining capacity, and coupled with the upcoming agricultural harvest season, the demand for diesel from heavy agricultural machinery is huge, which may further widen the supply-demand gap. He said:

There is no easy solution for diesel fuel.

The White House stated that it is actively addressing the issue through two pathways: encouraging Venezuelan production increases and boosting domestic U.S. refining capacity. A senior U.S. official indicated that the government is satisfied with the progress made in both areas.

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