Strait of Hormuz Crisis Impacts Global Oil and Gas Supply
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: stocktwits
- Supply Reduction Impact: The disruption in the Strait of Hormuz has removed nearly 13 million barrels per day from global oil supply, which is over 10% of worldwide consumption, potentially forcing consumers to confront a reality of insufficient oil and gas supply, thereby impacting economic activity.
- U.S. Production Growth Expectations: Despite the ongoing conflict, a survey by the Dallas Fed indicates that industry leaders expect U.S. oil production to grow modestly by 250,000 barrels per day by the end of 2026 and 500,000 barrels per day in 2027, which would only cover about 2% and 4% of the supply gap, respectively.
- Market Reaction: As of now, West Texas Intermediate (WTI) crude futures are down nearly 4%, hovering around $90.31 per barrel, while Brent crude futures have fallen about 3% to around $93.87, with major U.S. oil stocks like Exxon Mobil (XOM) and Chevron (CVX) declining about 1% in pre-market trading on Wednesday.
- Economic Consequences Warning: Logan warned that the economic consequences of reduced energy consumption will depend on the extent to which users can switch to alternative energy sources, and if shipping through the Strait does not soon return to pre-war levels, global oil and gas consumption may need to fall more significantly.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 146.960
Low
114.00
Averages
132.17
High
158.00
Current: 146.960
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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