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The chairman of global oil giant Chevron says Australia is a prime example of a country that has risked fuel shortages because of poor policy choices, adding it would be too expensive to develop new local reserves.

Michael Wirth, speaking at a major investor summit in New York, said projects in Australia could not compete for capital against Chevron’s other growth options. The Houston-headquartered company is Australia’s biggest exporter of liquefied natural gas and is among the world’s five largest oil producers by market value, behind Saudi Aramco and ExxonMobil.

Wirth said conflict in the Middle East had robbed the world of about 13 per cent of global oil and gas supply, and he predicted the crisis would permanently change energy policy in many countries.

“The world is going to be more focused on an insurance policy,” he said.

“There are some countries, like Australia, which had almost no reserve. They’ve shut down most of their refining capacity and were highly dependent on just-in-time product imports which are at great risk.

“The risk of supply outages in a country like that is much greater than it would be in a country like the United States.”

Australia had about one month’s supply of fuel when the war between the US and Iran broke out on February 28, is heavily reliant on imports and has allowed all but two domestic oil refineries to shut.

Prime Minister Anthony Albanese announced in May that his government would spend $3.2 billion expanding diesel and jet fuel reserves to 50 days.

Global surplus

Wirth said the price impact of the Iran war had been muted by a global surplus of oil and gas that existed before the war, as well as the release of fuel from strategic reserves in many countries including the US.

Wirth said those “shock absorbers” were temporary, and fuel prices would rise when they wore off. “Over the next few weeks we are likely to see those pressures flow through more directly. There is more upward pressure I would expect as we get into June and certainly July,” he said.

Oil and gas production in Australia is typically from conventional wells, where the product is extracted from permeable rock. Unconventional oil and gas production from less permeable shale rock is less common in Australia, but is increasingly in focus as companies such as Tamboran Resources and Inpex develop the Beetaloo Basin in the Northern Territory.

Wirth signalled that Chevron was unlikely to pursue shale projects in Australia in the near future, despite having large liquefaction facilities to backfill at Gorgon and Wheatstone in Western Australia.

He said shale resources in Australia were deeper, hotter and more expensive to develop than those in the giant shale gas industry in the US. “We’ve done some work around it [Australian shale] … it has got to compete in our portfolio and right now, we don’t see it competing in our portfolio,” he said.

Speaking at the same event, ExxonMobil vice-president Neil Chapman said his company was considering Australian shale gas projects, although he added that he was not yet convinced they could be financially viable.

“It’s quite a ways inland. You’ve got to build a lot of pipe to get it to the open market,” he said. “Can that compete in the global market?”

Wirth said coal demand would probably be stronger as a result of oil and gas shortages, with more reliance on the fossil fuel for energy generation.

People who can burn coal are burning coal and it is on an increase around the world,” he said. “On the other side of this we are likely to see coal consumption has been re-energised. I think you are going to see coal is going to be more robust going forward.”

Top-quality NSW thermal coal was fetching $US133.87 a tonne on May 29 according to GlobalCoal; up from $US94 a tonne in April 2025.