The following is a transcript of Charlie Gibson's exclusive interview with Rex Tillerson, chairman and chief executive of ExxonMobil, examining the oil crisis in this country, for ABC News' "World News With Charles Gibson," Aug. 13, 2008.
CHARLES GIBSON: Mr. Tillerson, you probably know the oil markets as well as anybody. If you can factor out speculation, and you can factor out emotion, what should the price of oil per barrel be right now?
REX TILLERSON: Well, Charlie, that's really a difficult question to answer, because there are so many factors that influence the price. And, obviously, oil is based on the fundamentals, though, of global supply and demand. Oil is a global commodity. And you've mentioned a couple of things that do have a significant impact on the price. And, certainly, the strength of the dollar plays an important role, because oil is priced in dollars the world over.
If you look at just basic fundamentals of supply and demand, clearly we've been at a price level that, my view has been for some time, is not reflective of strictly fundamental supply and demand, but also is reflective of a lot of uncertainty about the future of supply that you can attribute to any number of causes.
CHARLES GIBSON: Well, we're taught in college that markets are rational. And, yet, with demand increasing about 4 percent a year for oil, we've had a doubling of price in the past year. That doesn't seem rational.
REX TILLERSON: Well, this market has been demand-driven, because of the expansive growth that's gone on in these very rapidly growing developed economies around the world, the ones we're all familiar with -- China, India -- but also rapidly developing economies elsewhere. So this has been a demand-driven price phenomenon. And...
CHARLES GIBSON: But the increase in price is far greater than the increase in demand.
REX TILLERSON: Well, demand has gone up from 2001...
CHARLES GIBSON: Right.
REX TILLERSON: ... through this last year from 77 million barrels a day to 85 million barrels a day. So that is a very rapid run-up in demand at a time when supply has not been capable of responding as quickly. That is always the case. There are significant lead times involved in bringing large supplies of new crude oil on. And so there has been a supply lag in the ability to supply to respond.
CHARLES GIBSON: But you talked about a 10 percent increase in demand over those years. And we've had a far, far greater -- we've had a multiple in the price of oil over that period of time.
REX TILLERSON: Well, again, it's all dependent upon that strong demand pull that's going on in these rapidly growing economies.
CHARLES GIBSON: We learned today that Americans drive 12.5 billion fewer miles in June of this year over June of last year. Where's the price of gas headed?
REX TILLERSON: Well, again, hard to say, but clearly the high price is taking its effect on the American people. It's very difficult, we know, for families, particularly families that are dealing with tight household budgets already, to accommodate the kind of high price that they've had to deal with. And that has been the response that we would expect is that Americans would be wise. They would begin to find ways to reduce their demand, economize their trips, cut back on their consumption to deal with that high price.