Chevron CEO Mike Wirth says the global oil inventories and other market buffers that helped cap crude prices for months have "largely now played out."

U.S. oil prices vaulted above $100 a barrel earlier this week, as the U.S. and Iran escalated hostilities in the Strait of Hormuz waterway, the world's most vital oil artery, before slipping to $98 a barrel Friday morning. For months, markets have largely defied predictions of an energy crisis that would send prices soaring as long as the Strait remained closed.

At an energy conference in Austin on Friday, Wirth said the world had lofty commercial stockpiles of crude in storage coming into the year, which countries have drawn down to low levels now.

That bought time, as did China's decision to cut imports and rely on its immense strategic reserves of crude, which Wirth described as larger than the rest of the world's combined. China is beginning to pick up imports again.

President Trump's memorandum of understanding with Iran in June allowed tankers stuck behind the Strait between Iran and Oman to reach their destinations. Now, the conflict is ramping back up.

"The reason prices didn't go to levels people initially thought is the markets worked, and all these mechanisms helped to mitigate the price and supply risk," Wirth said. "Those have largely now played out."

It's hard to predict where oil prices will go, but at the moment, it's difficult to envision prices coming back down quickly, he said.

"I wish I could tell you that I saw some reason why things would ease, but it's difficult right now to see that happen," he said.