Chevron CEO warns oil buffers that cushioned the Iran war shock have been ‘drained’—and diesel relief may not come until 2027

The Iran war has pushed fuel prices to record highs, and the head of America's second-largest oil company says the world has run out of easy ways to absorb the shock.

"Those are all buffers in the system that have bought us time, but they've been drained," Chevron CEO Mike Wirth told CNBC's Squawk Box Europe on Oct. 7. "And so we're at much lower levels of inventory right now, and it makes the system more vulnerable to disruption."

Wirth said the world entered 2026 well supplied. "We came into this year with high inventories," he said, pointing to commercial stocks held by companies and strategic reserves held by governments worldwide. Since the war began in late February, those cushions have been steadily depleted : Companies have drawn down commercial inventories, governments have released emergency stocks, and sanctioned barrels have been allowed to reach buyers.

He called it "a very serious situation."

Wirth was blunt that stockpile releases are only a stopgap. They "buy time," he said, but the underlying problem is "constrained flows out of some of the biggest producing areas in the world."

Nowhere is the squeeze sharper than diesel, the fuel that moves trucks, trains, and farm equipment. The U.S. average hit a record $6.53 a gallon on Sept. 22, according to AAA data cited by CBS News , up from about $3.76 before the U.S. and Israel launched the war in late February. In California, the statewide average has topped $8 a gallon .

Don't expect that to change quickly. In its October Oil Market Report , released Wednesday, the International Energy Agency said the diesel market will stay tight well into 2027 and hinges on a recovery of fuel supply from the Middle East. Benchmark diesel prices have eased from September's records above $200 a barrel , but remain nearly double both crude prices and their precrisis levels, and the IEA said depleted diesel stocks are unlikely to be rebuilt beyond normal seasonal swings before the second half of 2027 .

The agency expects global oil supply to fall by an average of 5.8 million barrels a day this year, to 100.7 million barrels a day, before rebounding in 2027, and sees the market staying in deficit through year-end. It also forecasts that high prices will cut global oil demand by 2.6 million barrels a day in 2026, with diesel accounting for about a quarter of the drop.

With the Nov. 3 midterms less than three weeks away, fuel costs have become a political liability for the White House. An AP-NORC poll published Oct. 1 found that Americans disapprove of President Donald Trump's handling of the Iran war and blame him for higher prices, Fortune reported .