According to the head of Chevron, Mike Wirth, last year saw fundamental changes in the natural gas market caused by the war in Ukraine and the sanctions against Russia that followed. The prices of oil and gas remain volatile. 

All this has brought fundamental changes to global oil and gas markets and disrupted energy supplies from Russia. As you know, Europe has recently announced that it is no longer dependent on Russian gas supplies and is not going to change the situation in the future. This change is likely to remain for a long time, given the terrorist attack that knocked out the Nord Stream pipeline from Russia to Europe.

“The gas market, I think, is structurally changed for the long term,” Wirth said.

But he also noted that despite the sanctions, Russian oil is getting to the market, albeit at a different price, because ships have to travel long distances to get Russian oil and fuel to countries that have not imposed sanctions.

The biggest problem facing the market is logistical vulnerability because of unexpected supply disruptions:

“We don’t have a lot of inventory, we don’t have a lot of storage capacity,” Wirth said.

As such, it will be necessary to ensure reliable and affordable supplies while managing the energy transition to the low-carbon industry of the future. but a disorderly transition can be “painful and chaotic.”

We previously reported that Oil rises in price in anticipation of signals from the U.S. Federal Reserve.