As Global Fuel Markets Whipsaw Through Historic Volatility, JSV Global's Jason Venturelli Calls for a New Playbook on Fuel Risk
Global fuel markets are currently experiencing unprecedented volatility, prompting calls for a new approach to fuel risk management. Just a year ago, the outlook for oil prices was decidedly bearish, with the World Bank forecasting a six-year low in commodity prices and major banks predicting a rangebound year for crude in the high $50s to low $60s per barrel. Retail gasoline prices were anticipated to remain comfortably below $3 a gallon, reflecting a consensus that now seems outdated. This shift in sentiment underscores the unpredictable nature of the market, as geopolitical tensions, supply chain disruptions, and changing demand dynamics have all contributed to price fluctuations. Investors should be aware that the previous assumptions about stability in fuel prices no longer hold, and the landscape is now characterized by rapid changes that can significantly impact profitability. The call for a new playbook suggests that traditional risk management strategies may be insufficient in navigating this environment. As volatility continues, market participants must adapt to the realities of fluctuating supply and demand, which can lead to sharp price movements. The current situation emphasizes the importance of agility and responsiveness in investment strategies. With the potential for further disruptions, both geopolitical and economic, the energy sector must brace for continued uncertainty. This evolving scenario will likely keep oil prices on a rollercoaster trajectory, making it essential for investors to stay informed and ready to pivot as conditions change.
Why Shell and the Other Oil Majors Aren't Price Gouging
Crude prices are experiencing significant volatility, largely driven by geopolitical tensions in the Middle East, which have historically influenced market dynamics. This volatility is reflected in the rising gasoline prices that consumers are currently facing, a situation that often draws political scrutiny and accusations of price gouging against major oil companies like Shell, ExxonMobil, and Chevron. However, it is crucial to understand that these companies are not engaging in price gouging; rather, they are responding to the inherent fluctuations of the energy market. The economic importance of oil and natural gas cannot be overstated, as gasoline remains a vital product for everyday transportation. As oil prices rise, gasoline prices typically follow suit, directly impacting consumer spending and potentially influencing voter sentiment during elections. In the first half of 2026, Shell reported a 22% increase in revenues compared to the previous year, with earnings more than doubling, while Chevron's revenues surged by 28%, also seeing a doubling of earnings. ExxonMobil mirrored this trend with a 22% rise in revenues and a 66% increase in earnings per share. These financial results underscore the profitability of oil majors during periods of elevated oil prices, but they also highlight the cyclical nature of the industry. Investors should remain aware that while these companies benefit from higher prices, the volatility of the market means that such conditions can change rapidly. The current geopolitical climate and its impact on oil prices will continue to be a critical factor for energy investors to monitor closely.