Phillips 66 CEO warns Hormuz disruptions may linger

Phillips 66 CEO Warns of Earnings Volatility from Hormuz Disruptions

Mark Lashier, chairman and CEO of Phillips 66, cautioned on Wednesday that refining and petrochemical earnings face heightened volatility as shipping uncertainty in the Strait of Hormuz continues to weigh on global energy supply chains. Lashier made the remarks during a fireside chat at the Reuters Global Energy Forum in New York, where more than 600 energy industry leaders gathered for the two-day event running June 23–24.energycentral

Lingering Supply Concerns

According to Reuters, Lashier indicated that supply disruptions stemming from the Hormuz situation may linger as long as uncertainty around shipping persists in the Persian Gulf. The comments come as markets remain unsettled over conflicting signals about the waterway’s status. Over the weekend, Iran claimed to have closed the strait, while U.S. Central Command maintained it remained accessible to vessels, according to CNBC.cnbc

The mixed messaging has kept energy traders on edge. Oil prices dipped slightly on Tuesday, with Brent crude settling lower as investors monitored tanker traffic through the strait. President Donald Trump said Monday that 19 million barrels of oil traversed the waterway that day, a figure CNBC said it could not independently confirm.cnbc

Broader Market Impact

The Hormuz tensions have already reshaped refining economics. Goldman Sachs projected in early June that refined product margins would remain two to three times above historical averages through the remainder of 2026, with diesel margins exceeding pre-disruption estimates by $19 to $26 per barrel. Phillips 66 posted strong first-quarter 2026 results on the back of surging crack spreads and 95% refinery utilization.reuters

Wood Mackenzie warned in May that a prolonged closure scenario could push Brent crude toward $200 per barrel by year-end and drive diesel and jet fuel prices toward $300 per barrel in major refining centers.woodmac

Diplomatic Efforts Continue

Diplomatic channels remain active. Vice President JD Vance said progress had been achieved during discussions in Switzerland, while on Tuesday, Oman and Iran issued a joint declaration reaffirming sovereignty rights within the strait. The U.S. Treasury also granted a 60-day license permitting production, transportation, and sale of Iranian oil, set to expire August 21.cnbc

Lashier’s warning underscores the challenge facing downstream energy companies navigating a market where geopolitics, rather than fundamentals, increasingly drives margins.