We can't end up with Iran controlling the Strait of Hormuz, says API CEO Mike Sommers

Watch on YouTube ↗  |  July 28, 2026 at 11:22  |  7:35  |  CNBC
Speakers
Mike Sommers — President & CEO, American Petroleum Institute

Summary

API CEO Mike Sommers argues the oil market is dangerously tight, with depleted reserves and major supply chokepoints like the Strait of Hormuz keeping upside price pressure despite recent pullbacks. He credits surging U.S. production and pro-drilling policies for preventing a price spike, and sees new supply from Guyana and South America as long-term ways to bypass Hormuz.

  • Oil market is vulnerable due to depleted strategic reserves and restricted Strait of Hormuz flows.
  • Middle Eastern exports down 41% but crude prices have still pulled back, surprising given the risk.
  • U.S. production has increased 500,000 b/d since Trump took office, helped by leasing and Alaska reopening.
  • New supply from Guyana, Brazil, Argentina, and Venezuela is seen as critical to diversifying away from Hormuz.
  • Sommers warns any new disruption could send prices much higher due to the lack of shock absorbers.
  • China's weak demand, with oil imports down 5 million b/d, is partly offsetting the bullish supply story.
Ideas
Mike Sommers President & CEO, American Petroleum Institute 4:22
Exxon and Chevron benefit from Guyana oil
Exxon and Chevron are huge investors in newly developing oil fields in Guyana, which is a key part of diversifying global supply away from the vulnerable Strait of Hormuz chokepoint.
XOM CVX MED
Mike Sommers President & CEO, American Petroleum Institute 4:38
Crude oil underpriced given severe supply disruptions
Crude oil markets are underpricing serious supply risks. The Strait of Hormuz is essentially closed for five months, Middle Eastern exports are down 41%, and global strategic reserves (including the U.S. SPR) are critically low. Any further disruption could cause significantly higher prices, and the recent pullback to $80 WTI is surprising given these choke points.
BNO WTI HIGH
Mike Sommers President & CEO, American Petroleum Institute 6:08
U.S. oil producers benefit from pro-drilling policies
U.S. oil production is benefiting from Trump administration policies like guaranteed lease sales in the Gulf of Mexico and reopening of Alaska, adding about 500,000 barrels per day since the inauguration. The Permian Basin will continue to drive growth, making it an exciting time for the American oil business.
US oil producers MED
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This CNBC video, published July 28, 2026, features Mike Sommers discussing XOM, CVX, BNO, WTI, US oil producers. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Mike Sommers  · Tickers: XOM, CVX, BNO, WTI, US oil producers