Exxon Mobil CEO on the Global Oil Supply & ‘Revenge Saving’ 6/27/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. ExxonMobil's Darren Woods, the big oil CEO on energy around the world following the kickoff of the Israel-Iran conflict. Do we have enough? One of the advantages that the U.S. saw and the global market saw with respect to this disruption is just the growth in U.S. supply. I think it speaks to the importance of having domestic supply. The major players in the creator economy. One-time MTV boss Sean Atkins on the new innovations. TV didn't get rid of film. Cable didn't get rid of broadcast. The creator industry is not going to get rid of traditional media as we know it.

0:44What it is, is it's additive to the system. And prolific YouTuber Dar Mann rewriting the script. One of the biggest streaming platforms out there is coming to our studio next week to talk about us creating original content for them. So I think the transition from Hollywood-driven content to creators creating content for these platforms is happening right now. Plus, the latest on the negotiations over the big, beautiful bill in the Senate and seeking revenge, taxes and savings. Some good news on Americans' rainy day funds. Auto enrollment, is that like the auto pen? Oh, there I go again. It's Friday, June 27th.

1:23Squawk Pod begins right now. Stand Becky by in three, two, one, cue, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is off today. The U.S. and China confirming details of a trade framework now, a trade framework that aims to allow rare earth exports to flow more freely from China to America. This is according to China's Commerce Ministry. A spokesperson said China will review and approve export applications for items, while the U.S. will cancel a range of existing restrictions imposed on China.

2:06Yesterday, President Trump said the two countries had signed a deal the prior day. Details were thin on that announcement. This sounds like the official sort of signing of what they arrived at in Geneva, which then it was off. And Besson said... I think it was passed by the Chinese parliament or something. But remember, this was the framework that we thought was done. And then Besson said, no, they're not. And then people got mad. And then we came back. Now it looks like it's done, but it doesn't get us really any further than what we already sort of celebrated at one point. And then it seemed like it was off because China wasn't cooperating with RARERS.

2:45That's back on. But the bigger trade deal, obviously, this is not that. A Capitol White House official later clarified that the two sides had agreed to an additional understanding of a framework to implement what I was just talking about, the Geneva agreement reached in Switzerland last month. Commerce Secretary Howard Lutnick telling Bloomberg, probably the news service, not the mayor, former mayor, although we could use him now, that the Trump administration also has imminent plans to reach other agreements with 10 major trading partners. First, for his part, the president teased a potential trade deal with India that he said would open up that country.

3:21In the meantime, the Trump administration is signaling that it could extend the dates on which steep tariffs will be reimposed on other countries. The White House press secretary told reporters that the July 8th and 9th deadlines are not critical and that President Trump could choose to extend them. Or, she said, if other countries refuse to do a deal, the president could simply pick a tariff rate that he thinks is advantageous to the United States. And then Treasury Secretary Scott Besant asking the House and Senate to remove what has turned into a controversial piece of President Trump's tax and spending bill.

3:53Some people have called it the revenge tax. It would allow the Treasury Department to hit companies from other countries with the tax if the U.S. determines that those countries are putting unfair tax burdens on U.S. companies. In a series of posts on X, Besson said that the United States had reached an understanding with other G7 countries and wanted the U.S. House and Senate to get rid of that so-called revenge tax provision in the big bill. However, that tax was supposed to help pay for the president's marquee legislation, so it is unclear what removing it will do to the overall cost of the bill and what other changes might have to be made as a result.

4:29It now appears that the Senate may not begin voting on it today. That's something that had been teased earlier in the week. But, of course, all these questions about what can go into it, because they're using reconciliation, you can't have anything in it that's considered a rider that doesn't matter to the bottom line of the budget. And so there's a lot of things back and forth. And every time you change one of those, you may have to then change something else. A lot of leeway. And they're complaining about this parliamentarian. This parliamentarian, I thought, allowed them to put in the provisions for not regulating, allowing AI regulations beyond a federal level.

5:05It's hard to imagine how that works. Who appointed her? I think she was appointed in a previous administration or something. People are complaining. Republicans are complaining about that. But the parliamentarian is supposed to follow this rule, the Byrd rule. Yeah, but it's in the eye of the beholder. I don't know how much of it was, you know, the Byrd bath might have been a lot easier to do in the last reconciliation. that Democrats... Although the idea that they allow... Politics informs everything. Think about the judges across the country. The minute you have a ruling, you say, who appointed?

5:36Oh, it was an Obama appointee. I guess, but I hate to cast aspersions on every decision that somebody makes because it's not what the ruling party wants to have happen in some of these things. We had Ted Cruz, Senator Ted Cruz, on to say that they were going to have to talked to the Senate parliamentarian about wanting that AI regulatory ban. States and local jurisdictions would not be able to pass rules on AI. And even he admitted that it was, you know, a dubious call as to whether or not that could be worked in. Right. I don't. All I know is that Republicans are complaining that. And the Democrats complain when they're in power to.

6:10Right. Starbucks electing two new members to its board of directors as it seeks to execute on CEO Brian Nichols' turnaround plan, focusing on customer experience and digital tools. One of the new board members is former Yahoo CEO and Google executive Marissa Meyer. She's currently CEO of Sunshine AI, which is a tech startup that uses AI to help automate everyday tasks. The other is Dambisa Moyo, co-principal of family office Versaca Investments. She also serves on the boards of Chevron and Condé Nast and is a former employee of Goldman Sachs, as well as the World Bank in a news release. Starbucks praised Moyle as a skilled global economist.

6:52So the role of the parliamentary staff as advisory and the presiding officers may overrule the advice of the parliamentarian. But in practice, that's very rare. The most recent example of a vice president as the president of the Senate overruling the parliamentarian was Nelson Rockefeller back in 1975. He was vice president? No, I know. That ruling is extremely controversial to such an extent that the leaders of both parties immediately met and agreed that they did not want this precedent to stand. So the next week, the Senate altered the rule under consideration through a standard procedure. The Senate majority leader may also fire the parliamentarian, as occurred in 2001, during dispute between parliamentarian Robert Dove and Majority Leader Trent Lott.

7:36You remember that, I mean, the Byrd rule is so, it's Robert Byrd, obviously, from him. And he was so old, he was so old, he was a leading member of Congress, and he had been in the Klan. That's how old. From West Virginia, right? That's how old he was. So it goes all the way back to that. But the reason that they did this is because they didn't want people just sticking, you know, budget bills have to get passed. They didn't want people sticking all kinds of writers full of pork and their own pet projects to have them write through on something like this. If you're going to use this to force it through the Senate without having to have anything more than a majority.

8:12Both parties use it. You don't need 60 votes. You just need 50 votes to get it through. The whole thing gets around the filibuster. The whole thing is kind of a scam. And they try to force things and they have nothing to do with the budget and both parties do it. Yeah, I'm kind of in favor of the rule sticking. We almost don't have a filibuster. But you can thank Joe Manchin and Kirsten Sinema. Americans are tightening their belts after a post-pandemic spending spree. The latest read on the U.S. personal savings rate is going to be released at 830 Eastern. Ahead of that, Sharon Emerson is here to discuss how and why Americans are increasing their nest days.

8:46We just finished talking about the revenge tax. What are you talking about? There's more revenge? There's more revenge. You know, many Americans are changing their financial habits right now from revenge spending, that trend of splurging after the pandemic to now moving in the opposite direction, their revenge saving. That's what some are calling it as consumers focus more on building their savings. A recent Vanguard survey found 71 percent of Americans plan to shift their savings approach this summer to prioritize emergency savings and flexibility. Several factors are prompting consumers to be cautious and cut back.

9:20Fluid tariff negotiations, the prospect of higher inflation, interest rates lingering at higher levels longer than some expected. They're also concerned about geopolitics and social unrest. So many consumers want to stockpile cash right now to protect themselves from unexpected cost increases in the future. The personal savings rate is the percentage of income left after you pay your taxes and you spend money. That rate has risen sharply this year from three and a half percent in December to 4.9 percent in April. Meanwhile, the 401k savings rate is at a record high as some retirement plans are making it easier for workers to enroll and contribute.

9:58A new Vanguard report shows the average saving rate for employee deferrals was nearly 8 percent in 2024, matching record high levels from 2023. A recent report from Fidelity shows 401k saving rates hit a record high in the first quarter of 2025 with an employee contribution of nine and a half percent. And when you add matching contributions from employers, the savings rate for those participating in 401k plans is closer to Fidelity's recommended savings rate of 15 percent a year. Joe. So they're helping with the 401ks, but I mean, are companies getting people to save more or people really are doing it on their own?

10:38Well, I think companies are helping a lot with the auto enrollment feature that many 401k plans. But a lot more plans now have an auto escalation feature so that automatically your contribution will go up 1 % every year or 1 % or 2 % every year. And so that is forcing people to do the right thing, which is to contribute more money as they can as they get pay increases also. Auto enrollment, is that like the auto pen? Oh, there I go again. There I go. They're going on it. You're right. I can't. You know, if you can opt in, you know, I don't know. I think I sat my first job. I definitely was at least longer than I should have been before I got in my 401k.

11:21I think my first job, they automatically enrolled us. It was a very paternalistic thing that saved me a ton. Yeah. Yeah. It saves a lot of people. I would not have probably done it myself. Right. At that point, you're not thinking about retirement. You're thinking about paying the rent. Exactly. And you get a raise and you're like, OK, now more money to spend. And some companies are saying, but they have more money to put away now. So let's do the auto escalation. And it's helped a lot of people. And to boost these savings, are they watching CNBC? How are they doing it? They have to watch CNBC.

11:50How could they possibly do anything else? So that's helping, do you think? I think it's definitely helping. What are they using? They use CDs? Well, I mean, people are using, they're looking at high yield savings accounts and those, you know, close to 4 % still. So it's still better than inflation. You're still doing well with that. CDs over 4 % for a six month CD. But the other thing is some financial advisors are saying now is the time to think about some alternative emergency savings. And that could be if you have equity in your home, getting a home equity line of credit at the rate of seven or eight percent.

12:21You're not using this money, but you at least have it because you now have equity in your home. And what's interesting, they're saying with people who are concerned about job security, do that now while you have a job. To have the line. The only thing I will say is that if you have credit card debt, even if it's a higher rate, You can always shuffle that off if you get into a very dire situation with the home equity line of credit. If you don't pay it back, you lose your house. Exactly. You have to be very disciplined. You have to know that you're going to be able to. You're securing that credit rather than having the bank have that credit and you being able to eventually, worst case scenario, declare bankruptcy.

12:55Right, right, right. So, you know, you have to know yourself and what you're able to do. But still, at 7 % or 8%, if you have a big purchase. P-lock's great to have. Just don't use it for stupid stuff. Right, right. Exactly. Thanks, Erin. Sure. Cheese will be next. Coming up on Squawk Pod, ExxonMobil CEO Darren Woods is weighing the value of doing business in Europe with the costs of complying with the EU's regulations. We've ended up in Europe with a mishmash of, frankly, impractical regulations with unrealistic ambitions. That has slowed economic growth. It has made the businesses operating out of Europe uncompetitive.

13:35It has raised the cost of living in Europe. Plus, the price of oil amid disruptions from the Israel-Iran conflict and Wood's perspective on consolidation in his own industry. That's all right after this.

13:52Welcome back to Squawk Pod from CNBC. Here's Becky Quick. Joining us right now for an exclusive interview to discuss all things energy and oil is Darren Woods. He's ExxonMobil's chairman and CEO. And Darren, I want to thank you for being with us this morning. Good to see you. It's good to see you, too. We've been watching so closely what's been happening with oil prices. And we've seen a real rapid rise and then drop off again after what's been happening in the Middle East. Crude oil back at sixty five dollars a barrel. But it got up there for a few days. And I just wonder, from your perspective, what you were watching on this, what you think is happening and how volatile.

14:34oil prices will continue to be? Well, I think you've got to start with the context of the global markets prior to the Israeli bombing of Iran. The markets were very well supplied. In fact, there was plenty of spare capacity and OPEC was bringing additional barrels onto the marketplace. And so prices were generally trending down with that additional supply coming into the marketplace. What we saw right after the initial bombings is the markets reacting to the potential implication of impacting the production and the supply coming from that region, not necessarily what was coming out of Iran. In fact, there was plenty of supply available to offset any barrels that were disrupted and kept out of the market coming from Iran.

15:16It was more of a concern around the transportation corridors, the Straits of Vermouth, or other production in the region. As the bombing and the conflict progressed, what became very clear was a concerted effort not to disrupt that global flow of oil and natural gas. And so as a result, the markets have stabilized and prices have come back down, reflecting what I think is a very healthy supply of both gas, natural gas and oil. In other words, you think these prices probably stick around these levels for a while? Yeah, I think, you know, the concern was a broader disruption in the region today.

15:54I think it looks much, much less likely that that will happen. And so I think stability there, if something was to change, you'd see that impact, just reflecting the critical source of supply coming out of that region of the world. Did you change any plans when you saw prices spike, or were you just kind of planning contingency plans that you could roll out if need be? Well, the most immediate reaction that we took with respect to what was happening there is we've got people based in that region, in that area. And so our first priority was to make sure they were safe and that we were taking care of their families and protecting our individuals there, which we took action with that respect.

16:35You know, if you look at what we're doing as a business, we're diversified all around the globe. And we have a very significant presence here in the U.S. And in fact, I think one of the advantages that the U.S. saw and the global market saw with respect to this disruption is just the growth in U.S. supply. I think it speaks to the importance of having domestic supply, a broad diversified supply base around the planet and the growth there to offset and stabilize potential disruptions in any place in the planet. So our production here in the U.S., we're growing faster than anybody else. We've got a very large production base here, big investments.

17:11We were continuing on that basis. Hey, Darren, we've been talking this morning about the revenge tax, which I didn't even realize was part of the big, beautiful bill that's been working its way through Congress. The Treasury Secretary, Scott Bessent, has asked Congress to take out the revenge tax because he says that they've negotiated with the G7 nations to make sure that American companies aren't being held up for some held hostage, basically, for some taxes that the EU was putting in. This was designed to counteract that. And when they got their way with the negotiations, they said, OK, let's take it out.

17:49I know you all, the oil industry and the administration, have been working on trying to do some similar activities when it comes to EU climate regulations. Can you tell us a little bit about what's happening and what you've been talking to the Trump administration about? Sure. I would say I'd start by just saying it's not an industry specific issue. This is a broader issue associated with any large company doing business in the EU. And I think, again, the context for this is if you go back, the European politicians have for decades been trying to decarbonize their economy. Unfortunately, they've been putting policies in place that are more aligned with an ideology rather than the true understanding of the technical issues and the solutions that are available to address the impacts of climate and reduce emissions.

18:38We've ended up in Europe with a mishmash of, frankly, impractical regulations with unrealistic ambitions. That has slowed economic growth. It has made the businesses operating out of Europe uncompetitive. It has raised the cost of living in Europe. I think policymakers are waking up to that issue. Unfortunately, their response is not to fix and revamp the policies that they put in place that aren't working, but instead try to bring the rest of the world down to their level. And so they've passed legislation last year called the Corporate Sustainability Due Diligence Directive, CSDDD, which basically requires any company selling into Europe to meet EU regulations and try to meet, again, their ambitions with respect to climate that, frankly, is not technically practical.

19:28So for a company like ExxonMobil, any other large companies selling into Europe as well, you have to shape policies for your entire operations to meet EU regulations. That says for us here in Texas, we have to make our business here in Texas comply with EU regulations. If we don't do that, they can sue us. And the minimum penalty that they put in place is 5 % of our global revenues. So it is it is a rational piece of policy. It's probably some of the worst legislation I've seen passed anywhere in the world. And so we are advocating to the Trump administration to address this as part of their trade policies.

20:08We've talked to Congress about putting in blocking legislation. We're frankly trying to help the Europeans save themselves here. Because the alternative would be that you would no longer do business in Europe. And that is exactly the issue, is the exposure and the requirements that that puts on a multinational company like ourselves means what's the value of doing business in Europe versus the cost of implementing some impractical, unachievable regulation across our entire operations all over the planet. Qatar Energy out of Qatar has been very vocal in saying they'll stop supplying LNG if that legislation is enacted.

20:44And so I think it's a very serious threat to the people of Europe and the economic well-being. It sounds very much like the Digital Services Act, although the idea of it coming back with the 5 percent tax that they could put on your entire global revenue. But the idea of having to run your entire business anywhere in the world based on what they have said, I guess that's a different and new standard. You've had conversations, I think, directly with President Trump about this. I've talked to President Trump. I've talked to the EU president. and I've been engaged across the political spectrum, really trying to raise the awareness and to point out the fact that EU politicians are basically trying to regulate U.S.

21:25companies in the U.S., and frankly, any company around the world who does business in the EU. The irony of this as well, it's not just our emissions that we're producing, but that law requires us to reduce the emissions of our consumers. And so it's a very irrational piece of legislation that, frankly, is going to do significant damage to the economy and, frankly, any business who wants to sell into Europe. Darren, this week we heard rumors brought up that the company has shot down, but the idea of a tie up with Shell buying BP, it kind of points to the consolidation that we've seen in the industry kicked off by you and some of the big deals that you've done as well.

22:11Do you think we will see more consolidation in your industry? Yeah, I think I can't speak for other companies, but if you look at what we've been trying to do, the opportunity to consolidate ultimately has to be driven by the ability to create additional value above and beyond what either company can do individually. Our strategy has been to really focus in on what we think are key competitive advantages, strengthen those advantages. One of the chief ones for us, we've been very focused on, is technology development, making sure that we can bring value to the resources that we're trying to produce.

22:47And when you develop a unique capability in that space, you can find other companies that you can apply that technology to and basically make one plus one equal three. And so if you look at our Pioneer transaction, when we did the transaction and announced it, we said we were going to generate about$2 billion on average over 10 years of synergies. We recently updated that to$3 billion just based on the value that we're able to unlock with the combination of both what we brought and what the Pioneer organization had in place. And my expectation is we'll continue to up that synergy level because we're finding more and more opportunities.

23:25That's the drive for consolidation and combining companies. My expectation is with the work we've been doing to strengthen our advantages, we'll find more opportunities for our company to do that. Obviously, can't speak for others. You can't speak for others when it comes to Chevron Hess. The litigation that you guys have been tied up under the mediation, I guess I should say, has prevented Chevron from being able to go ahead and close the deal with Hess because of the disagreement over Guyana, that partnership that is seen as the crown jewel for that. Can you give us an update on where that stands?

23:57Well, it's going through the process of arbitration. You recall that HES, 70 % of HES's value is locked up in the Guyana asset that we have been developing, that we believe that transaction gives us a preemption right. Obviously, HES and Chevron feel differently about that. We weren't able to reconcile that difference, and we're basically using the mechanism that was laid out in the contract to go to arbitration. We're going through that process. My expectation is over the next month or two, we should see a ruling from that panel and we'll get, I guess, clear guidance on the interpretation of that contract.

24:36Hey, Darren, I don't envy you trying to, you know, satisfy not only the Europeans, but even in this country as administrations change. and we've had Republican congressmen or maybe senators, they refer to it universally now as the Green News scam. And they refer to some of these renewable credits in the bill as they keep using the word scam there as well. The president, it feels differently than the last administration, I think. Lee Zeldin, I've had conversations with him. So I don't know if you know at this point what you're supposed to do in terms of, you know, you've never thought about abandoning fossil fuels, obviously, but you certainly have taken a lot of steps to appease the very powerful climate lobby that was so important.