TotalEnergies CEO Patrick Pouyanné said on Monday that a toll would be preferable to a prolonged closure of the Strait of Hormuz, through which 20% of global oil and gas passes. He spoke at a conference in Washington on the sidelines of the IMF and World Bank spring meetings. He warned of supply tensions if the situation lasts beyond three months.
Patrick Pouyanné, CEO of TotalEnergies, stressed the need to reopen the Strait of Hormuz for oil market freedom. “It is clear that the reopening and free circulation in the Strait of Hormuz, even if it implies paying compensation to anyone, is crucial for market freedom,” he stated.
Navigation through this strategic strait has been paralyzed since the first day of the Middle East war. Only a few ships, mostly Iranian, have passed recently. An additional blockade on Iranian ports, decided by US President Donald Trump and effective Monday, worsens the low liquidity in the oil market, according to Pouyanné.
Tehran imposes an illegal passage fee of one dollar per barrel, but the real issue is the threat to circulation. Western countries have about three months of stocks to weather the crisis, unlike Asia. Beyond that, supply issues for kerosene and diesel could lead to rationing, Pouyanné warned.
This situation accounts for the sharp rise in oil prices seen on Monday.
