ConocoPhillips CEO says oil producers need to gear up for volatility
A Saudi shake-up could keep oil markets volatile – and one of the world's largest energy companies said it is getting ready.

Ryan Lance, CEO of Houston, Texas-based ConocoPhillips , said his company is readying itself to make profits even if oil prices dip to $40.

"We can sustain our production, pay our dividend, below $40 a barrel," he said. "That's part of the transformation that we've been through."

The company sold more than $16 billion in low-margin assets last year, Lance said, in a bid to make the company more resilient. An analysis conducted this summer suggested that U.S. shale producers have an average for West Texas Intermediate.

Lance, who is also the chairman of the American Petroleum Insitute, made his remarks on CNBC's " " Wednesday afternoon.

Oil prices have fallen for much of the last decade, though in recent weeks they have been headed upward. Brent crude, the international benchmark, hit its highest level since mid-2015 at over $64 a barrel earlier in the week and has risen more than 14 percent in the past month.

Investors have had their attention on the Middle East this week as ongoing tensions between Saudi Arabia and its neighbors reached , sending oil on its recent tear higher.

Saudi Crown Prince Mohammed bin Salman bin Abdulaziz said Tuesday that Iran was guilty of "direct military aggression" after Tehran-backed Houthi rebels based in Yemen reportedly fired a missile aimed at Riyadh. The kingdom intercepted the missile.

Earlier in the week, a in connection with a sprawling crackdown on influential royalty and bureaucrats that some analysts said was an effort to consolidate the crown prince's domestic powers.

Analysts have said that the events in Saudi Arabia could lead to a strong decline in oil prices in the longterm even as they push them up in the short run.

Dennis Gartman, an influential commodities analyst who edits the Garman Letter, said Tuesday that in the short run the by $1 or $2, though it will ultimately lead to a decline.

Prices could rise as high as $70 a barrel, according to Roberto Friedlander, head of energy trading at Seaport Global Securities – though Friedlander said they will later drop to $50.

Shares of ConocoPhillips were up slightly Wednesday at $53.52. The company is up more than 17 percent over the past three months.