Chevron CEO: U.S. energy prices will rise sharply this winter just make "tricks" useless!

By    14 Sep,2022

Mike Wirth, chief executive officer (CEO) of Chevron, one of the world's largest energy companies, warned that U.S. consumers need to prepare for high winter heating bills.


Europe is already in the midst of a crisis triggered by reduced natural gas supplies, to which Wirth said Europe is likely to fall into recession because of the gas crisis. But the United States, as a difficult brother, may also experience similar pain.

He said the price of natural gas in the United States will rise significantly this winter.

Windfall tax So far this year, the U.S. gasoline prices have risen 15%. And benefiting from the rise in energy prices, energy companies such as Chevron have seen a significant increase in earnings.

This also makes the energy stocks become a different scenery on the U.S. stock market, Chevron shares have risen nearly 40% this year, is one of the few bright spots in the Dow Jones index, while another energy giant ExxonMobil's share price soared nearly 60% this year.

The energy companies to send a "fortune", but also many governments to consider the introduction of windfall profits tax, the European Union in an emergency energy ministers meeting last Friday, on the levy of energy windfall profits tax reached a consensus, but Wirth believes that the policy does not make sense.

He said that if the tax on the energy industry is increased, this will instead reduce energy investment efforts. In addition, energy companies have global production and capital is highly mobile, so after a country introduces a windfall profits tax, energy companies are likely to move their investments elsewhere.

The real strategy to solve the problem is to increase supply, and Chevron will naturally produce more oil if it has the opportunity to make a financial profit, Wirth noted.

The Politicization of Energy Wirth also noted that Chevron, despite its recent ability to draw money, has been in the red for the past few years, and that energy companies are basically in a cycle of profit and loss. Therefore, these companies should also not be targeted by the government because they are now making money.

He also expressed concern about the extent to which the government is now politicizing oil prices. He noted that through his conversations with the White House, he realized that politicians don't always fully understand the way energy markets really work.

Wirth repeatedly stressed that the best way to bring energy prices down is to increase supply...

But the U.S. and some European countries are doing things differently than he thinks, such as putting a price cap on Russian oil, even though that could lead to further supply cuts and a price rebound in Russia.

In addition, he also criticized U.S. Energy Secretary Granholm's call for U.S. energy traders to reduce foreign exports. Doing so, he said, would take away needed supplies from the rest of the world and further push up prices.