Chevron CEO Mike Wirth said physical crude delivered into Asian markets is now closer to $150 per barrel than $100, highlighting a widening disconnect between global futures benchmarks and the real cost of moving barrels through disrupted supply chains.
Wirth made the comments at the Energy Intelligence Forum in London. He warned that global oil and fuel buffers are becoming thinner as the Middle East conflict enters its eighth month.
Why Physical Oil Can Cost Far More Than Brent
Brent futures represent a benchmark price. They do not capture every expense required to deliver a specific barrel to a refinery.
Asian buyers must also absorb freight rates, insurance, regional premiums and the cost of navigating disrupted shipping routes.
Those expenses have surged as tanker attacks around the Strait of Hormuz increase risk. Crude flows through Hormuz have fallen about 27% to 10.1 million barrels per day, although alternative routes through the Gulf of Oman and Red Sea have helped keep overall Middle East exports close to pre-war levels.
That helps explain why Brent can remain around $105 even while delivered barrels cost significantly more.
The Oil Market Is Running With Less Cushion
The price gap is becoming more important because inventories are also unusually thin.
Industry executives estimate that global commercial oil stocks have fallen below 6 billion barrels, with only around 10% readily accessible during a disruption. More than 1 billion barrels have already been released from emergency reserves during the Middle East and Ukraine crises.
That leaves the market increasingly sensitive to relatively small disruptions.
Coinpaper’s oil inventory explainer explains why depleted stocks amplify price moves even before the world experiences an outright shortage.
Governments are already responding. The G7 recently approved a 100 million-barrel emergency reserve release aimed at easing pressure on crude and diesel markets.
