Exxon Mobil CEO Darren Woods stated that the oil market has not yet fully absorbed the impact of the Iran war and the closure of the Strait of Hormuz, which has caused an unprecedented disruption in global oil and natural gas supply [1]. Woods explained that the immediate effects of the supply shock have been mitigated by oil tankers already in transit, releases from strategic petroleum reserves, and drawdowns of commercial inventories [1]. However, he warned that as these sources are depleted and if the strait remains closed, oil prices are expected to rise further [1].
Oil futures have experienced significant volatility during the conflict, with prices surging on escalation risks and falling on hopes for peace [1]. On Friday, U.S. crude oil dropped more than 3% to $101.38 per barrel, and Brent crude fell about 2% to $108, levels which Woods described as consistent with historical norms rather than reflective of the current scale of Middle East disruption [1]. Woods anticipates that oil flows from the Persian Gulf could normalize within one to two months after the strait reopens, but cautioned that refilling depleted strategic reserves and commercial inventories would create additional demand and upward pressure on prices [1].
Exxon Mobil reported that its production in the Middle East would decline by 750,000 barrels per day compared to 2025 if the strait remains closed through the second quarter, and throughput to refiners globally would fall by 3% compared to the fourth quarter of 2025 [1]. Approximately 15% of Exxon's total production has been impacted by the closure [1]. Additionally, Iranian attacks on Qatar's liquefied natural gas export hub damaged two production lines in which Exxon has an ownership interest; these lines accounted for about 3% of Exxon's upstream production in 2025 [1].
Despite oil prices soaring about 57% since the war began, Exxon's stock has remained flat over the same period, and shares were down about 1% in midday trading on Friday [1].
CONCLUSION
Exxon Mobil's CEO highlighted that the oil market has not yet priced in the full impact of the Iran war and the Strait of Hormuz closure, warning of further price increases if the disruption continues. The company faces significant production declines and operational challenges in the region, while its stock performance has lagged the surge in oil prices. Market participants should prepare for continued volatility and potential upward pressure on energy prices.