ExxonMobil (XOM), the largest oil and gas giant in the United States, recently warned that global oil inventories will fall to record lows in the coming weeks, forcing a new spike in oil prices and curbing demand. Neil Chapman, senior vice president of Exxon, stated at the Bernstein investor conference in New York: “We are approaching unprecedented inventory levels. Oil inventories are really, really very low. You can argue whether it will take two weeks or three weeks to hit those truly low levels. Once we reach that point, you will see prices spike.” He pointed out that when inventories hit historic lows, the spot price of Brent crude will surge to between $150 and $160 per barrel, and demand destruction will eventually restore supply-demand balance.
According to statistics from the International Energy Agency, Iran’s closure of the Strait of Hormuz may have already removed approximately 1 billion barrels of oil supply from the market, making it the largest oil supply disruption in history. UBS stated that global oil inventories fell by a total of 246 million barrels in March and April, and cumulative production losses could exceed 1 billion barrels by the end of May, with the market still “severely undersupplied.” Citigroup released a research report saying that if long-term peace negotiations between the U.S. and Iran remain difficult, leading to a prolonged blockade of the Strait of Hormuz, Brent crude prices could rise further from the recent pullback around $100 per barrel, potentially hitting new阶段性 highs.
The Strait of Hormuz has now moved beyond the phase of “better to open as soon as possible” to nearing the stage where “stable passage must be restored urgently.” The strait transports approximately 20 million barrels of oil and petroleum products daily, accounting for about 20% of global consumption, while also carrying about one-fifth of global liquefied natural gas trade, making it the “aorta” of the global energy system. Once the disruption persists, the market cannot fully compensate through alternative routes or short-term production increases.
Oil and gas industry executives believe that futures prices are still trading on hopes for a ceasefire, but the physical market and inventory system are approaching a tipping point. Once commercial and strategic inventories near “minimum operating levels,” oil prices will shift from linear increases to nonlinear jumps. The U.S. recently imposed new sanctions on Iran’s energy revenues, indicating that even with signs of a ceasefire, the situation remains extremely fragile. If the Strait of Hormuz cannot be stably reopened in the coming weeks, a rapid price surge driven by a combination of inventory levels, freight costs, and physical market panic buying will most likely occur, with spot markets for jet fuel, diesel, and other products bearing the brunt of the price pressure.
