(Reuters) The worldwide pure fuel market has been extra essentially modified for the long run than the oil market by Russia’s invasion of Ukraine, Chevron Corp Chief Government Mike Wirth mentioned at CERAWEEK.
The battle in Ukraine and ensuing Western sanctions upended international oil and fuel markets and disrupted provides from Russia.
Europe has turned away from dependence on Russian fuel provides and has no intention of adjusting that sooner or later, Wirth mentioned in remarks on the CERAWeek vitality convention.
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An assault that disabled the Nord Stream pipeline from Russia to Europe means adjustments can be long-lasting, he added.
“Fuel markets, I feel, are structurally modified for the longest,” Wirth mentioned.
Russian oil remains to be attending to the market, he mentioned, however at completely different prices, as ships journey longer distances to get Russian crude and gasoline to international locations that haven’t imposed sanctions.
That has left the oil market and logistics tight and susceptible to any sudden provide disruption, he added.
“There’s not a whole lot of swing capability, there’s not a whole lot of stock capability,” mentioned Wirth. “There’s now a whole lot of constraints … an sudden occasion right this moment would create a special steadiness.”
Wirth mentioned sustaining safe and inexpensive provides whereas on the identical time managing the vitality transition to the low-carbon business of the longer term was “one of many biggest challenges of all time.”
A disorderly vitality transition could possibly be “painful and chaotic”, Wirth mentioned.
“We’ve to be very cautious about turning system A off prematurely and relying on a system that does not but exist and hasn’t been confirmed,” he mentioned.
