Exxon chief warns of skyrocketing energy prices as shareholders approved plan to exit blue state

ExxonMobil’s Senior Vice President Neil Chapman issued a stark warning to the public that energy prices may explode upwards in the coming weeks on the same day his company’s board approved moving the company’s corporate structure from New Jersey to Texas. 

Speaking at the Bernstein Conference in New York on Thursday, Chapman warned that crude oil prices could go as high as $160 per barrel in the coming weeks as dwindling reserve inventories finally bottom out. 

“We’re approaching unheard of inventory levels,” he said. “I mean really, really low levels. You can debate whether that’s going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you’ll see prices shoot up.”

Prices have stayed low, Chapman posited, because of the release of strategic petroleum reserves by various nations. 

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“Commercial inventories of crude oil, of liquids, think petroleum, gasoline, diesel, jet fuel, they’ve all run down. And running down those inventories has mitigated or offset, supplemented by the release of strategic petroleum reserves, which most of the Western countries have done. All of that has mitigated the impact,” Chapman explained. 

He then warned that dated Brent, the primary benchmark for the price of crude oil in the global market, “will shoot up… up to $150, $160.” 

“And I think crude being in this sort of $90 to $110 for the last whatever it is, six weeks, has really been mitigated by running down inventories. It can’t last forever.” 

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Dated crude dropped from a monthly average of $117 in April to near $103 for May, declining sharply in recent days on news of progress in a peace deal between the U.S. and Iran. 

However, it’s still far higher than it was before the U.S. and Israel launched a bombing campaign on Iran in late February, when it was hovering near $75 a barrel, according to S&P Global. 

Chapman delivered his message on the same day that Exxon shareholders approved a plan to move the company’s legal home from New Jersey to Texas. 

Citing Texas’ strong regulatory environment, ExxonMobil CEO Darren Woods said the state was a better fit for the company in a statement. 

“Aligning our legal home with our operating home, in a state that understands our business and has a stake in the company’s success, is important.”

ExxonMobil already moved its headquarters to Texas in 1989 and all of its corporate leadership work from the Lone Star state already. The company said 75% of it’s U.S.-based workforce already work in Texas as well.

Exxon first announced plans to make the move in March.