Energy News — CEO of US Occidental Petroleum Vicki Hollub Shares Insights on the Global Oil Markets
Global oil markets are going to be a hot topic this year, as American citizens gear up for another US Presidential Election campaign. Oil is always high on the radar of the US foreign policy agenda, not just because of geopolitical trends, but because most Americans understand that energy prices are a setback to their quality of life.
That’s where we should begin this discussion on the supply-demand scenarios for global oil markets going forward. Since the US is not only among the world’s biggest consumers of oil, but also among its largest producers of it. And that’s why Occidental Petroleum CEO Vicki Hollub sat down with reporters at CNBC for an earnest discussion on the future of oil prices.
During an interview at the Smead Investor Oasis Conference in Pheonix, Arizona, this week, she said the oil markets are going through a deep shift in the supply-demand scenario:
“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply…The market is out of balance right now, but again, this is a short-term demand issue. But it’s going to be a long-term supply issue.”
CEO Hollub touches on aspects of the Middle East conflict, and how the Red Sea situation is creating transparency in how the data reveals where shipping is being affected by attacks from Houthi rebels.
The Houthis are an armed group, with backing from a state actor in Iran, who is using this as a proxy war against other state actors Saudi Arabia and United States. It is very important to understand these principles of the Middle East conflict today.
A variety of international shipping companies have decided to stop traversing the Red Sea due to the Houthi attacks. Meanwhile, the constant focus on oil prices has not died down since the original attack by Hamas on Israel on October 7. Before the October 7 attack, it appeared that OPEC+ would control the narrative on oil prices through its voluntary production cuts. Now, with this geopolitical dimension in the Middle East, it looks more like an issue of whether ships — in this case, crude oil tankers — can actually traverse the Red Sea without any major consequences.
The Red Sea crisis is just the latest twist in the global energy markets scenario — of which is going through a massive geopolitical shift — thanks to the Russia’s invasion of Ukraine and the OPEC+ output cuts. While Saudi Arabia seeks to seize every opportunity it can in China’s domestic energy market, the looming spectre of Russian energy supplies, which seem to be finding their way back into European markets regardless of US and EU sanctions for the war in Ukraine, will continue to be the focal point of geopolitical shifts between the US, EU and Russia going forward.
Read more about the geopolitical trends and global energy markets in the publication Areas & Producers.