Global Energy Leaders Gather in London to Overcome Supply Disruptions Amid US-Iran Conflict

Energy market insiders gathered in a vast underground ballroom in central London this week, uniting in their support for a renewed emphasis on resilience within the oil industry. Patrick Pouyanne, chief executive of TotalEnergies, told the Energy Intelligence Forum that the duration of the US-Iran war has transformed the sector from "a just-in-time to a just-in-case" industry. Meanwhile, Amin Nasser, chief executive of Aramco, stated that the producer has not cancelled a single committed delivery throughout the crisis conditions, thanks to multiple routes to market and the vast capacity of the East-West pipeline.

This resilience persists despite supply problems caused by blockades in the Strait of Hormuz and, more recently, the Bab Al Mandeb strait. As the Aramco CEO noted, oil would have hit $200 a barrel if not for the East-West pipeline. "It has multiple lines with a lot of redundancy and flexibility built in and, because of that, all our customers are getting all their shipments required," he explained. Looking ahead, Mr Nasser added, "When this crisis happened, we said, 'OK, we have three routes. Is that enough?' Maybe not for the future. And this is the responsibility of the current generation, to think of a fourth and a fifth export way out."

Sheikh Nawaf Al Sabah, chief executive of Kuwait Petroleum Corporation (KPC), highlighted the strategic value of owning the company's own tanker fleet, a capability dating back to the 1990s. "I think there is a major difference that we are able to accomplish through our tankers by having these tankers owned by us," Mr Al Sabah said. "We control where they go and the crews are our own crews. They, of course, all have the discretion of deciding whether they want to go through a passage or not."

An emerging picture of new codes of conduct stemming from the US-Iran war now extends across customers, consuming nations, producers, and product classes. Vaclav Bartuska, the Czech ambassador to the UK, remarked that these long-term forces of change bear some resemblance to the calculations last observed between the US and the former Soviet Union. "We are relearning the escalation ladder, which was the basis of the Cold War for 40 years," he told The National. Reflecting on past diplomatic frameworks, he noted how the Soviet Union and the United States managed a decades-long confrontation without direct open war through proxy conflicts and established communication codes.

Ichiro Takahara, chairman and chief executive of Japan's strategic reserves specialist operator Jogmec, emphasized that diversification to avoid chokepoints is a top priority in the country's stockpiling policy. He added that cooperation with resilient suppliers like Aramco and KPC would involve building storage depots closer to customers in places such as Japan. Takayuki Ueda, president of Inpex, echoed these sentiments, noting that buyers now place heavy emphasis on the security and resilience of the entire supply chain.

Kevin Gallagher, managing director of the Australian company Santos, asserted that countries with differing strengths must collaborate to boost supply undertakings. He predicted that Australia would adopt more pragmatic, less ideological policies regarding energy development and supply going forward, easing restrictions on oil and gas exploration. While the 2022 Russian invasion of Ukraine initially pushed European legislators to seek new energy deals in the Gulf, the current war has further narrowed those options, prompting European governments to pursue broader supplier diversification as higher oil and gas prices make previously marginal global projects economically viable.