The CEO of Hess Corporation told CNBC on Tuesday he believes the U.S. and other nations should be doing more to help stabilize oil prices, as the Russia-Ukraine war continues to impact energy markets.
“The oil market now is in the intensive care unit, and we need to act,” John Hess said in an interview on “Squawk Box,” before media reports surfaced that President Joe Biden planned to ban Russian oil imports to the U.S. as soon as Tuesday. Hess has overseen his company’s transition from integrated oil company to a pure-play exploration and production firm.
The International Energy Agency, which includes the U.S., needs to announce a “release of 120 million barrels from the strategic petroleum reserves this month [and] commit to another 120 million barrels” released in April, Hess said. “Basically, by doing that, you put a cushion in the system.”
Last week, the 31 members of the IEA said they would release 60 million barrels of oil from strategic petroleum reserves. While saying the move was “well intended,” Hess said still “too little,” adding “it’s only about 4% of the world’s petroleum stock.”
“You need to remember and everybody does, the IEA was formed to deal with shocks and oil disruptions after the Arab embargo by Henry Kissinger in 1974,” Hess said, suggesting the current moment is precisely the kind of situation the international organization was established to deal with.
WTI crude oil has soared roughly 70% year to date, while international benchmark Brent crude oil has also shot up 70%. Futures contracts for both WTI and Brent this week hit their highest levels since July 2008.
“The United States and the IEA need to act quickly to avoid an economic recession that’s coming on us,” Hess said. “They’ve got to get ahead of it.”
In Tuesday’s trading, oil prices jumped to session highs as traders reacted to reports of the imminent U.S. Russian crude import ban.
The IEA did not immediately respond to CNBC’s request for comment on Hess’ remarks.
