Live updates: Follow the latest news on US-Iran war
The world's biggest energy supply shock in half a century is set to dominate the industry's biggest event of the year.
About 10,000 government ministers, C-suite executives and industry leaders will descend in Houston, Texas, the heart of the global oil and gas industry, for CERAWeek by the S&P Global energy forum. Often referred to as the “Super Bowl of Energy”, the annual gathering is the marquee event on sector's calendar.
In focus this week will be the Iran war and the spillovers in the Middle East affecting energy markets, with economic disruption rippling across the globe.
Vice chairman of S&P Global and co-founder of CERAWeek
“The impacts hit everyone, even if they play out at different speeds in different regions. It impacts everything from nuclear power in Taiwan to natural gas availability in Asia,” said Mike Kolodner, global renewable energy and US power leader at Marsh Risk.
“The thing that makes it toughest for any leader anywhere right now is that we don't have certainty over where this is going to go, how long this will take, what it will take to secure the Strait of Hormuz and when we can see resumption of economic activity.”
A new, dangerous chapter of the war unfolded late last week when Iranian missiles struck the Ras Laffan gas industry in Qatar, one of the world's largest exporters of liquefied natural gas (LNG). State-run company QatarEnergy said the attacks will reduce LNG export capacity by 17 per cent, with an estimated loss of $20 billion in annual revenue.
The damage, which could take five years to repair, is expected to affect supply to European and Asian markets.
The attacks, which came after Israel launched a strike on the South Pars gasfield in the Arabian Gulf, followed similar strikes on energy infrastructure across the region, including at refineries in Kuwait and Saudi Arabia, Abu Dhabi's Shah gas plant, and ports in Oman and Fujarah.
US power leader at Marsh Risk
Iran's attack on Ras Laffan drew condemnation from UN Secretary General Antonio Gutteres and Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and managing director and group chief executive of Adnoc.
Those strikes exacerbated what was already a major disruption of supply chains, caused by the effective closure of the Strait of Hormuz. Aramco chief executive Amin Nasser, due to address industry leaders this week, has previously warned there would be “catastrophic consequences” for oil markets and the global economy if the disruption were to be prolonged.
S&P Global's Daniel Yergin, who cofounded the event in 1983, said the war has caused “the biggest disruption in oil production in history”.
Top executives at US oil majors including Exxon, Chevron, ConocoPhillips are also due to address their peers in various sessions throughout the week.
For all the disruptions, market reaction has been tame, if not overly complacent, an industry source said. Brent crude prices touched $118 a barrel on Thursday before easing to about $108 a barrel, while US crude settled around $95 a barrel.
While the duration and scale of the war remain unknown, their economic consequences are already being felt. Advanced central banks are seen in a holding pattern amid this uncertainty and are flagging the risks of rising oil prices, which in the short-term could boost inflation, while a sustained increase could jeopardise growth.
US President Donald Trump's administration has taken a scattershot approach towards mitigating rising oil prices through tapping the nation's strategic oil reserves, announcing a risk insurance programme through the International Development Finance Corporation and easing sanctions on Russian oil to bring more energy supplies to the market.
The administration has also been leveraging its newfound control over Venezuela's oil production since the capture of President Nicolas Maduro in January.
The Treasury Department on Wednesday eased sanctions on Venezuela that will allow US firms to do business with Caracas's state-owned oil and gas company in an effort to boost oil supplies. Underscoring the pressure his administration faces over higher petrol prices at home, the White House said Mr Trump would waive a shipping regulation for 60 days.
While geopolitics look set to play a central role during this week's gatherings in Houston, the city's annual energy forum has been expanding beyond the traditional themes of crude and oil.
Electrification and powering data centres will also be a major focus as hyperscalers continue to build out artificial intelligence infrastructure during the AI boom and questions continue to mount over rising electricity costs.
Meanwhile, the race for the world's critical minerals persists as the Iran war puts a new focus on weaknesses in the sector's supply chain. Mr Trump's administration has been on a stockpiling spree since China's export restrictions of minerals last year, and the US has announced a series of initiatives to reduce reliance on Beijing imports including through Pax Silica and the Forge alliance.
