Oil bosses warn prices will soar in a matter of weeks as inventories near unprecedented lows — ‘I mean really, really low levels’
The two largest US oil companies have joined the growing chorus of voices sounding the alarm about the imminent disaster that global markets may face.
With the Strait of Hormuz still effectively closed, top oil-consuming countries are rapidly depleting their reserves, helping to keep crude prices in check.
But Exxon Senior Vice President Neil Chapman warned at an industry conference on Thursday that such declines cannot continue indefinitely.
“We are approaching unprecedented inventory levels,” he said. According to CNBC. “I’m talking about really low levels. You can debate whether it’s going to fall that low in two weeks or three weeks. Once you get to that point, you’ll see prices rising rapidly.”
US-Iran ceasefire talks remain deadlocked for now, and the Strait of Hormuz remains a disputed waterway. It was on display on Saturday US forces launch missiles at blockade runner To disable it after ignoring repeated warnings.
Iran also continued its attacks against commercial ships trying to cross the strait without permission. US directs more ships to safety.
The US has released nearly 50 million barrels from its Strategic Petroleum Reserve since the start of the war with Iran, with the stockpile falling 12% to 365 million barrels, its lowest level since April 2024.
But the situation is even more dire in major regional oil hubs such as Cushing, Okla., where West Texas Intermediate crude oil is priced. Data from Kpler shows stocks there have fallen to about 24.5 million barrels from 33 million barrels about two months ago, close to operational lows of about 20 million barrels.
JPMorgan says commercial oil stocks in the developed world are “approaching operational stress levelsStocks in major economies could reach “critically low levels” by the end of June, Capital Economics said.
“I don’t know if it’s two to three weeks or three to four weeks,” Exxon’s Chapman said Thursday. “What I’m really saying is that when you hit minimum stock levels and all-time low stock levels, there’s only one way to go.”
Similarly, Strip CEO Mike Wirth said at the same conference on Thursday that oil prices will likely jump soon as the market’s “shock absorbers” run out and the market’s ability to continue absorbing disruptions weakens.
“Over the next few weeks we will see these pressures reflected more directly in physical prices, and there is more upward pressure that I expect as we move into June and certainly into July,” he added. according to Finance Times.
