As tensions escalate between Iran and Israel, energy giants Baker Hughes and Woodside Energy are exercising caution and refraining from making oil price predictions. This comes amid recent strikes exchanged by the two nations, including a significant Israeli attack on Iran’s nuclear and military facilities, which resulted in the deaths of key Iranian nuclear scientists and military leaders.
At the Energy Asia conference in Kuala Lumpur, Lorenzo Simonelli, CEO of Baker Hughes, shared with CNBC’s “Squawk Box Asia” his experiences that make predicting oil prices a risky endeavor. “My experience has been, never try and predict what the price of oil is going to be, because there’s one sure thing: You’re going to be wrong,” Simonelli remarked. He noted the fluidity of the past 96 hours and expressed hope for de-escalation in the region, indicating that Baker Hughes will closely monitor the situation and adopt a wait-and-see approach for its projects.
Meg O’Neill, CEO of Woodside Energy, echoed similar sentiments during the conference, stating that while the company is closely monitoring the conflict’s impact on global markets, they refrain from making firm oil price forecasts. She highlighted significant effects on forward prices due to recent events and pointed out that any disruption in the Strait of Hormuz could lead to even more substantial price impacts as global customers scramble to secure energy supplies.
The Strait of Hormuz remains a critical channel for the global oil supply, with approximately 20% of the world’s oil transported through this narrow waterway between Iran and the United Arab Emirates. Despite media narratives about a potential blockade, the Joint Maritime Information Center has not confirmed any closure or blockade but continues to monitor the situation closely.
The ongoing conflict underscores the intricate link between geopolitics and energy markets, as noted by O’Neill, who referenced historical events like World War II and the 1970s oil crisis as precedents for the current scenario. The energy sector remains vigilant as developments unfold, with the potential for significant ramifications on global oil prices and supply chains.
