HOUSTON -- Global physical markets for diesel and jet fuel are tighter than futures price suggest, and the supply consequences of the Strait of Hormuz closure will persist long after the conflict resolves, senior energy executives and government officials said Monday at CERAWeek 2026 by S&P Global in Houston.
"The forward curve is mostly the financial players out there trying to position themselves for what they think is going to happen," Mike Wirth, chairman and chief executive officer of Chevron, said.
"In the physical world, people that have the products, see the tightness of diesel and jet fuel in some parts of the world. In particular, Asia is facing some real concerns about supply. There are physical manifestations of the closure of the strait that are working their way around the world and through the system that I don't think are fully priced in futures curves," Wirth added.
Brent crude barrels have held above $100/barrel since March 13, after spiking to nearly $120/barrel in the days following U.S. and Israeli airstrikes against Iran on Feb. 28. Global diesel prices have reached their highest level since December 2022, according to OPIS data.
Wirth said that the current disruption is structurally different from the 2022 Russia-Ukraine crisis, which he said never produced a true physical supply constraint despite significant market volatility, since only one pipeline was damaged and barrels continued to flow through different routes.
Even if the conflict reaches resolution, Wirth cautioned that returning to even "normal" supply flows will take considerable time since key oil and gas infrastructure in the region has already been significantly impacted.
Sultan Al Jaber, chief executive of Abu Dhabi National Oil Co., speaking remotely from United Arab Emirates, which he said had sustained what he described as an illegal and unprovoked attack, framed the Hormuz closure in stark terms.
"Blocking the Strait of Hormuz is not an act of aggression against one nation. It is economic terrorism against every nation, and no one should be allowed to hold the world hostage. Not now. Not ever," Al Jaber said.
Al Jaber said financial and policy mechanisms such as strategic reserve releases and sanction waivers cannot substitute for a physical resolution of the chokepoint.
"This is not a supply issue. It is a security issue and has only one solution: keeping the strait open. We can not feed our way out of this crisis," Al Jaber said.
The Strait of Hormuz carries approximately 20 million b/d of oil and refined products, roughly one fifth of the global supply, according to the Energy Information Administration.
About 5 million b/d is currently being rerouted using Saudi Arabia's East-West pipeline and the UAE's bypass pipeline, according to published reports, leaving an estimated 15 million b/d without viable alternative routing.
U.S. Energy Secretary Chris Wright said the Trump administration acted on Iran because the conflict could not be deferred further, citing the regime's nuclear ambitions and its decades-long record of destabilizing regional energy markets.
"This is a conflict that we simply couldn't kick down the road anymore," Wright said. "(Iran is) getting ever-better missiles and a huge conventional arsenal to protect its core goal, which is to build a nuclear bomb."
Wright said U.S. strategic petroleum reserve oil began flowing last Friday and described the release mechanism as a swap rather than an outright sale, with the U.S. government set to recover more oil than it releases by next year.
Wright added that the International Energy Agency coordinated a release of 400 million bbl globally and that Japan moved faster than any other nation to execute its share of the release.
"The biggest outperformer in the agreed release was Japan. Because where is the problem most intense? It is in Asia," he said.
The dislocation of supply is being felt most acutely in Asia, which absorbs the largest share of Gulf oil exports. Takehiko Matsuo, vice minister for international affairs at Japan's Ministry of Economy, Trade and Industry, admitted that the crisis has essentially destroyed Japan's energy security playbook. He noted that Tokyo can no longer operate on the assumption that severe, long-term emergencies like this will not happen.
"The fundamental assumption that such a kind of emergency will not occur, and that it will not last - such a foundation doesn't work anymore," Matsuo said.
Matsuo said Japan is actively redirecting energy procurement towards the West Coast of North America in response, with Japanese companies already in discussions to purchase energy from the U.S.
He added that roughly 80% of Japan's energy imports currently transit the South China Sea, creating a second example of supply chain vulnerability and compounding the Hormuz exposure.
Chinese naval and coast guard vessels are highly active both inside and immediately adjacent to Japanese territorial waters, according to multiple reports.
Investors with assets across the energy supply chain described the current crisis as unlike anything in their professional experience.
"In my career, I've never been in such a crisis where there are so many repercussions long term. This is the first time we've seen it in a major energy producer," said Marcel van Poecke, managing director and head of global energy at Carlyle Group, which holds upstream, refining and retail assets internationally.
Van Poecke said the Hormuz closure raises questions beyond immediate supply disruption about the proliferation of global chokepoints, including Yemen and the Red Sea, and their long-term implications for energy infrastructure investment.
Ben Luckock, co-head of Oil at the Vitol Group, one of the world's largest commodity trading houses, said the current crisis is significantly more difficult to manage than the Covid-19 demand shock of 2020.
"Covid was a much more predictable event once you really understood what the virus was doing and the demand destruction coming from it. The event we are undergoing right now is orders of magnitude different because the balance effects of every single day that goes by are so massive by comparison," Luckock said.
Luckock emphasized that replacement supplies cannot easily fill the void left by Strait of Hormuz disruptions. For context, he explained that the 200,000 to 400,000 b/d boost from Venezuela following U.S. sanctions relief equals only a few hours of normal daily transit volume through the strait.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by My Nguyen, mynguyen@opisnet.com; Editing by Bayan Raji, braji@opisnet.com and Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
March 24, 2026 11:56 ET (15:56 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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