Exxon Mobil Corporation (XOM.US) CEO warns that oil prices still have room to rise, and the impact of the closure of the Strait of Hormuz has not fully manifested yet.

Exxon Mobil Corporation (XOM.US) CEO Darren Woods said on Friday that the global energy supply disruption caused by the war and the closure of the Strait of Hormuz has not been fully absorbed by the market, and future oil prices may still face further upward pressure. Woods pointed out during the company's first-quarter earnings conference call that the market's response to the supply shock has been relatively limited, partly because many oil tankers carrying crude oil were still in transit in the early stages of the conflict. Meanwhile, countries releasing strategic oil reserves and using commercial inventories have to some extent cushioned the supply tightness. However, he warned that as the conflict continues, these buffering measures will gradually be depleted. Once inventories are exhausted and the strait remains closed, oil prices will see a more pronounced increase. "In view of the unprecedented impact on global oil and gas supply, the market has not fully reflected this impact," Woods said. "If the strait remains closed, further shocks will become more apparent." Since the US-Iran conflict erupted, oil prices have fluctuated significantly. The market has alternated between escalating conflict and peace expectations, leading to sharp fluctuations in oil prices. Woods pointed out that current oil price levels are closer to the historical range of the past decade and do not fully reflect the severity of the disruption in Middle East supply. He expects that once the Strait of Hormuz reopens, Persian Gulf crude oil supply in the region will gradually return to normal within 1 to 2 months. However, due to the need to redistribute oil tankers and digest backlogged orders, there will be a lag in supply recovery. Furthermore, if strategic reserves and commercial inventories have been significantly depleted during the conflict, countries and companies will restock after the conflict ends, further increasing market demand and putting upward pressure on oil prices. The company stated that if the Strait of Hormuz remains closed in the second quarter, Exxon Mobil Corporation's daily production in the Middle East will decrease by about 750,000 barrels compared to 2025, and global refinery supply will decrease by about 3% compared to the fourth quarter of 2025. Woods revealed that about 15% of the company's total production has been affected by the strait's closure. In addition, Iran's attack on Qatar's liquefied natural gas export facilities has also affected the company's operations. According to regulatory filings, two production lines in the company's related projects were damaged, accounting for about 3% of its 2025 upstream production capacity. Despite an accumulated increase in oil prices of about 57% since the conflict broke out, Exxon Mobil Corporation's stock performance has been relatively flat, remaining stable during that period. As of Friday's closing, the company's stock price was down by about 1%.