Chevron's Wirth says drained oil buffers have left the market exposed

Chevron CEO Mike Wirth says the cushion of commercial and government strategic oil stockpiles that the world built up heading into 2026 has been steadily drained, leaving energy markets, and diesel in particular, far more exposed to disruption than they were at the start of the year.

Wirth's comments point to a steady depletion of both commercial inventories and strategic reserves that has been underway for months, a drawdown that has left far less of a buffer available to absorb any fresh shock to supply. With less slack in the system, Wirth said markets have become noticeably more vulnerable to disruption than they were when inventories were fuller.

Diesel prices have borne the brunt of that tightness. US average prices climbed to record levels in September, well above where they stood earlier in the year, with some regional markets seeing even steeper increases. Benchmark prices tied to diesel have also approached levels nearly double those of crude oil itself, an unusually wide gap that reflects just how stretched supply has become relative to demand.

Forecasters expect the squeeze to persist. Projections point to a decline in global oil supply this year and a diesel market that stays tight well into 2027, with stockpiles not expected to return to more comfortable levels until the second half of that year. High prices are, in turn, expected to curb demand somewhat as consumers and businesses adjust, though that adjustment is unlikely to resolve the imbalance quickly.

Governments have already moved on several fronts to try to ease the pressure, including coordinated releases from strategic reserves among G7 countries and adjustments to tax treatment for certain diesel products, though Wirth's remarks suggest those measures have so far only partially offset the broader drawdown in buffers that has left the market this exposed.