Marathon Oil Chairman and CEO Lee Tillman said that while oil prices may not be spiking in response to Thursday’s airstrike in Iraq, ongoing tensions in the Middle East will support higher oil prices going forward.
He attributed the lack of a stronger initial price reaction to the United States’ surge in production.
“I think the dampening effect … is really the impact of the U.S. energy renaissance,” he said Tuesday on CNBC’s “Power Lunch” from the Goldman Sachs energy conference in Miami Beach, Florida. “We make up about 8% of the global supply today, and those are reliable, highly secure barrels that the market is counting on, and I do believe that’s reduced this risk premium from returning back into the market.”
That said, he argued that U.S. West Texas Intermediate crude prices will “likely” end the year higher since tensions are “likely going to persist” which “creates a bit of a floor under oil and gas pricing.”
Tillman’s comments come as oil prices spiked more than 3% on Friday following Thursday’s killing of Iran’s top commander Qasem Soleimani. But since then some of the enthusiasm has faded. On Monday oil settled little changed, and on Friday prices declined 1%.
Marathon focuses on oil and gas exploration and production, and is a player in the U.S. shale industry, with operations focused on Texas, New Mexico, Oklahoma and North Dakota. The company also has sites in Equatorial Guinea.
The stock has shed 12% over the last year, underperforming the energy sector’s 0.6% decline, and the S&P 500′s 27% gain.
