Oil markets could be a month away from the moment of truth. Brace for a ‘non-linear’ price spike and panic buying, analysts warn
Oil markets are facing significant challenges as the Strait of Hormuz remains closed, leading to warnings of critical supply shortages. Analysts predict that if the situation does not improve, oil prices could surge to unprecedented levels. The International Energy Agency has noted a rapid depletion of oil inventories, raising concerns about future price volatility and panic buying.
- ▪The Strait of Hormuz is largely closed, impacting oil supplies globally.
- ▪JPMorgan forecasts that commercial oil inventories could reach operational stress levels by early June.
- ▪Brent crude prices could exceed $130-$140 a barrel if the strait remains closed and inventory depletion continues.
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Dire warnings about oil supplies are coming from everywhere lately as the Strait of Hormuz remains largely closed while President Donald Trump’s trip to China failed to produce a breakthrough to reopen the critical waterway.Recommended Video While investors have been trading on hopes that the Iran ceasefire will remain intact, there is little sign that the oil trade will return to normal soon, forcing them to reckon with the reality of worsening shortages and an imminent tipping point ahead. JPMorgan predicted that commercial oil inventories in the developed world could “approach operational stress levels” by early June. Saudi Aramco said global inventories of gasoline and jet fuel could reach “critically low levels” ahead of the summer.
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