Politico reports:

Global energy leaders have been jolted by the enormity of what the U.S.-Israel war with Iran means for their business — and they’re not liking what they’re seeing.

It’s the second time in four years that top White House officials have taken the stage at the CERAWeek by S&P Global conference to plead with producers to ramp up their drilling to cover supply disruptions from war-driven oil and natural gas price shocks. But unlike the coordinated international response to counter Russia’s 2022 attack in Ukraine, the Middle East war has drawn little support from allies and has seemed disturbingly ad hoc, industry executives said, leaving the industry feeling unsure on how to react.

“We’ve not seen anything like this — there’s been no disruption of this scale in the past,” Gareth Ramsay, chief economist at oil and gas giant BP, told the conference. “It’s every oil analyst’s study piece or worst nightmare — one that we never thought would happen.”

The energy market fallout is becoming political as well. Trump’s approval rating fell to 36 percent amid the public’s anger over the war and the steep jump in gasoline prices, according to a Reuters poll released Tuesday. The dissatisfaction threatens to doom Republicans’ attempts to keep control of Congress in this year’s midterm elections.

Executives from the world’s largest oil companies appeared more astonished about the scale of the supply disruption from the war than thrilled about the higher prices. The war has snarled the Mideast operations for several companies, some of whose CEOs — including Exxon Mobil and Saudi Aramco — skipped the conference even as high prices boosted their profits.

For many in the sector, the war has turned their worst fear — the closure of the Strait of Hormuz — into reality. The waterway through which 20 percent of the world’s oil leaves the Middle East to reach the wider market has been targeted by Iran, which has also destroyed or heavily damaged major refineries, oil and gas fields, and gas export plants around the Persian Gulf.

“This is the worst I’ve seen,” Paul Sankey, senior adviser at consulting firm Oliver Wyman and a longtime energy market analyst, said of the turmoil in the oil market due to what he called “Gulf War III.”

“How do you replace all this gas, all this oil, helium? The list goes on,” he said.

The White House said tankers would again move through the strait freely — and energy prices fall — once the United States achieves its military goals.

“President Trump knows exactly what he is doing, and his entire energy team has taken many actions to mitigate the effects of these short-term disruptions,” White House spokesperson Taylor Rogers said in a statement. “Ultimately, once the military objectives are completed and the Iranian terrorist regime is neutralized, oil and gas will flow more freely than ever before and prices will rapidly drop again.”

The sheer scale of the chaos the war has brought to the industry poked some holes in the face of the conference itself: Some of the world’s top oil producers who are regulars at the annual Houston gathering were notable in their absence. Exxon Mobil CEO and Chair Darren Woods, whose company has major oil and gas operations in the Gulf, and Amin Nasser, CEO of national oil company Saudi Aramco, skipped this year to address the disruptions. Top executives from the state-run oil companies in Kuwait and the United Arab Emirates appeared virtually.

“We are outraged by this attack against us,” Shaikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corp., said of recent strikes by Iranian projectiles that damaged a major refinery there. “This is an attack against not only the Gulf, but it is an attack that is holding the world’s economy hostage.” [Continue reading…]

Politico reports:

The Trump administration ending its war against Iran now would essentially cede control of the key energy choke point of the Strait of Hormuz to Tehran, President Donald Trump’s former secretary of Defense said Monday.

The assessment from former Gen. Jim Mattis comes as President Donald Trump declared a five-day pause on military strikes against Iranian energy infrastructure after the U.S. and Israeli attack against Iran enters its fourth week. Iran’s retaliation has forced the de facto closure of the narrow passage, where 20 percent of the world’s oil and seaborne gas supplies move from the Middle East to the wider market.

“Iran right now, if we declared victory, they would now say they own the strait,” Mattis said during the CERAweek by S&P Global conference. “You’d see a tax for every ship that goes through.”

“We’re in a tough spot, ladies and gentlemen,” Mattis said. “I can’t identify a lot of options.” [Continue reading…]