Hunter Hunt, the grandson of famed Texas oil baron H.L. Hunt, is concerned about the impact from damaged Middle Eastern energy infrastructure that could leave oil production lower for years to come.
In a fireside chat led by Lorie Logan, president of the Federal Reserve Bank of Dallas, Hunt talked about a number of Iran war issues including shut-in oil production, damage to refineries and the effective closure of the Strait of Hormuz, through which about a fifth of the world’s crude used to flow.
“This has been everybody’s worst case nightmare scenario of planning,” the co-president of Hunt Consolidated Inc. said Wednesday. “This has woken up the Iranians to take a slightly different view of how they view that Strait, and what they can get away with.”
Hunt’s public comments are rare for an executive tasked with running 91-year-old Hunt Oil, which has operations globally including Yemen and the Kurdish region of Iraq. He also said at the Dallas Fed event that his family’s closely held energy group has recently signed a memorandum of understanding in Venezuela, where acting President Delcy Rodriguez is looking to revive production.
Hunt raised concerns with the amount of oil production shut in by countries in the Middle East since the US-Israel war began in Iran in late February.
“We’re in uncharted waters; we’ve never seen volumes like this shut down the way that it’s been,” he said. “There are legitimate questions about when you open the Strait up again and everybody can produce again the way they did, those reservoirs may not act the way that they were acting on Feb. 27 at all.”
It’s possible that oil production from the Middle East may remain materially lower for years to come because of the damage suffered there, Hunt said.
“The infrastructure damage to the refining assets are real,” Hunt said. “There’s a lot of refining capacity that’s sitting inside of the Gulf that’s been harmed out of this.”
Written by: David Wethe @Bloomberg
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