Name: Paul Sankey on Iran War, Hormuz Risks and Energy Price Spike
Uploaded: 2026-03-23T21:38:04.000Z
Duration: 5 min 21 s
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First, I'd love to get your reaction to President Trump saying right now there have been some good talks with Iran, how you think this will affect the situation, the market, and

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Well, I think it's obviously it's driven everyone crazy, quite frankly, because, you know, it was a very rough Friday for people who are trying to trade the market already with two conflicting Truth Social posts from the president.

Obviously, we went through the weekend under the enormous threat that there would be attacks on energy infrastructure in Iran, which the Iranians then said would lead to the counterattack against the desalination plants in the Gulf, which is terrifying because obviously that becomes a humanitarian crisis very quickly if that would happen.

So this was all the context of this morning there being an announcement, which in some ways was a true taco insofar as the president is now talking about negotiating.

And also, of course, suspending the bombing, according to him.

And again, that's what we've been looking for, really, is just let's just start by stopping bombing.

we don't know really the full truth, there's reports that Israel is bombing today.

And of course, there's been various different messages coming from Iran along the lines of either there's been no negotiations or there are some negotiations in Pakistan.

You know, we don't really honestly know what's going on.

So with all that going on, what is the market mispricing about this crisis?

Well, the Chevron CEO this morning said that basically there isn't enough information to price things correctly, but

at the moment the futures strip looks too low.

I think the problem here is that there's such a devastating economic impact that it's very hard to believe that we'll sustain very high prices because what you're effectively going to do is crush a lot of these Asian economies.

You're already crushing the Gulf economies by the day, and

so the demand impact could be very negative from all of this.

So it's hard to outright state that, yes, you should be buying longer-term oil simply because we could be into a global depression type situation.

You know, you just talked a little bit about big oil CEOs.

What do you think they are communicating to the White House right now during all of this uncertainty?

Above all, don't mess with the free market for US energy.

So the big message that they're going to send very strongly is don't ban exports of crude, don't ban exports of products.

Let's, you know, at least leave our market open for free trading because obviously with the Straits of Hormuz being shut, if you were to directly intervene in the market, such as banning gasoline exports, there would be a short-term major gain in terms of reducing the gasoline price, but

you're just adding a further level of distortion and uncertainty to the market.

Do you envision the Straits really ever getting back to what we've known?

I think this is because this is the first time it's ever been shut, it's a structural change because it's identified what is a major Achilles heel in terms of the potential to actually stop shipping.

Up to now, you'd always thought, well, it'd be hard to stop shipping because you can't put a chain across the Strait.

But what the Iranians unfortunately have demonstrated is that just by threats alone, they can shut the Straits, and

therefore that risk has been introduced to the market as an ongoing structural risk.

With all this risk and all of everything that we have seen, what do you think this effect do you think this will have over big oil's investments appetite in the Middle East?

Well, up until a month ago, they were getting excited about reinvesting in the Middle East, and

they were actually praising President Trump for the openness that they were finding when they went to the Middle East in terms of investment.

A good example would be Chevron getting into Iraq again on better terms.

Now, unfortunately, because of what we're saying about the Straits of Hormuz being structurally denigrated in terms of a much higher risk investment environment, we think that we're going to have to go to more domestic energy across the world.

It's going to be domestic gas and oil production to the extent that people can develop it.

And that should fundamentally alter the amount of investment that goes into the Middle East and also how much, for example, domestic energy infrastructure is invested in.

With all of this going on, what's your expectation for Venezuela getting other US oil companies to go to work there?

Yeah, I think that's an obvious Western Hemisphere obviously benefits from any uncertainty in the Middle East.

And the general situation in Venezuela is, you know, while uncertain, certainly being promoted by Chevron as one in which they're fairly aggressively planning to expand production and invest.

And as time passes, I think you'll see more investment in Venezuela because it is such a huge resource so close to the US Gulf refiners.

So, you know, I think they are getting into it as we speak, and

I think they will continue to do so assuming the security situation stays okay, which seems to be the case.

But again, the CEO of Chevron this morning at the plenary session was saying that it's just going to take time in terms of the ability to really redevelop what has been a sector that's been chronically underinvested and mismanaged for basically 20 years now.

And so these things just can't be turned on overnight.

So to answer your question, I would say more of a '27 and beyond change, but

one which has enormous potential is absolutely no question.

By some measures, as we all know, that Venezuela has the largest undeveloped oil reserves in the world.

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Paul Sankey on Iran War, Hormuz Risks and Energy Price Spike

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