Eni CEO says oil industry is pivoting to Asia, Latin America

Eni ↗ 0.91% CEO Claudio Descalzi told an Italian parliamentary panel on Thursday that energy markets are failing to account for the scale of geopolitical risks reshaping global supply, as the oil and gas industry redirects capital toward Southeast Asia and Latin America in response to prolonged disruptions in the Strait of Hormuz.

Permanent Risk in the Middle East

Speaking before the committee, Descalzi said that the Middle East will remain a source of elevated risk even after hostilities subside. Russia and the Gulf region, including Iran, "will not be able to contribute significantly to energy product supply for a while," he said, adding that "even when they return to the market, things will look completely different."worldenergynews+1

The remarks come after months of shipping turmoil in the Strait of Hormuz, the chokepoint through which roughly 20 percent of global oil supply transits. Iran declared the strait closed earlier this year following U.S.-Israeli military strikes, and despite intermittent reopenings, commercial traffic remains well below normal levels. More than 34,000 ships were diverted in the first four weeks of disruptions alone, according to a FreightWaves report.freightwaves+2

Capital Flows to New Frontiers

Descalzi said the Hormuz crisis has drawn industry and government attention to alternative supply regions. Southeast Asia, South America, and Africa are "promising regions for oil and gas," he said, with the first two expected to attract the largest investment.oilprice+1

In Southeast Asia, Eni and Malaysia's PETRONAS have launched Searah, a joint venture consolidating 19 upstream gas assets across Indonesia and Malaysia, anchored by deepwater developments in the Kutei Basin. In South America, Eni is helping develop the roughly $30 billion Argentina LNG export complex in Río Negro province alongside Abu Dhabi's XRG.oilprice

Broader Energy Landscape

Descalzi's testimony aligns with warnings from other quarters. The World Economic Forum's Energy Transition Index, published in June, found that the global energy transition has "stalled" despite record investment of $3.3 trillion, with geopolitical tensions driving fragmentation across energy systems. In a separate interview with Il Sole 24 Ore published on July 11, Descalzi said "in the short term, it's possible" that the global energy crisis worsens as oil inventories decline and competition for supplies intensifies.bloomberg+1

Europe's continued dependence on imported LNG to fill gas storage ahead of winter remains a central vulnerability, one that Descalzi's parliamentary appearance sought to underscore.