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strikeMay 30, 2026

Oil bosses warn prices will soar in a matter of weeks as inventories near unprecedented lows — 'I mean really, really low levels' | Fortune

Summary

The two biggest U.S. oil companies joined the growing chorus of voices sounding the alarm on the imminent doom global markets could soon face. With the Strait of Hormuz still effectively closed, top oil-consuming countries have been rapidly draining their reserves, helping keep crude prices in check. But Exxon Senior Vice President Neil Chapman warned at an industry conference on Thursday that such drawdowns can’t go on indefinitely. “We’re approaching unheard of inventory levels,” he said, according to CNBC. “I mean really, really low levels. You can debate whether that’s going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you’ll see price shoot up.” For now, the U.S.-Iran ceasefire talks are deadlocked while the Strait of Hormuz remains a contested waterway. That was on display Saturday, when U.S. forces fired a missile at a blockade runner to disable it after ignoring repeated warnings. Iran has also kept up attacks on commercial ships attempting to cross the strait without its authorization, though the U.S. is guiding more ships to safety. The U.S. has released about 50 million barrels from its Strategic Petroleum Reserve since the war with Iran started, sending the stockpile down by 12% to 365 million barrels, the lowest since April 2024. But in key regional oil hubs like Cushing, Okla.—where West Texas Intermediate crude is priced—the situation is more dire. Data from Kpler indicates that inventories there have fallen from 33 million barrels nearly two months ago to about 24.5 million, near operational lows of about 20 million barrels. JPMorgan has predicted that commercial oil inventories in the developed world could “approach operational stress levels” by early June. Capital Economics has said stockpiles in top economies could hit “critically low levels” by the end of June. “I don’t know, whether it’s two to three weeks or three to four weeks,” Exxon’s Chapman said on Thursday. “What I’m really saying is, once you get to the minimum inventory levels and all-time low inventory levels, there’s only one way to go.” Similarly, Chevron CEO Mike Wirth said at the same conference Thursday that oil prices will likely soon jump as the market’s “shock absorbers” are depleted, weakening its ability to continue absorbing the disruption. “Over the next few weeks, we’re likely to see those pressures flow through more directly to physical prices and there’s more upwards pressure that I would expect as we get into June and certainly into July,” he added, according to the Financial Times. When the strait first shut down after the U.S. and Israel launched their war on Iran, analysts predicted crude prices could skyrocket as high as $200 a barrel. That hasn’t happened as massive releases from oil reserves blunted the impact. At the same time, the U.S. temporarily eased sanctions on supplies from Iran and Russia, while countries in Asia began rationing. Wirth acknowledged that oil prices had not risen as much as people had expected, but said he expects governments to focus on building reserves back up as “insurance” against a future shock, adding more demand and putting upward pressure on prices. “The likelihood that another shock is around the corner is something policymakers are going to have to bear in mind . . . how long they want to roll the dice before they refill inventories is a question that I think we’re going to see policymakers have to grapple with,” he explained. Karen Young, a senior researcher at Columbia’s Center on Global Energy Policy, said the best-case scenario is for oil flows to return in 60 days. But the more likely scenario is that they come back intermittently, dragging the timeline into next year. As a result, markets must deal with the fallout from inventory depletion and industrial disruption, she said in a post on X on Friday. “A new normal is a higher energy price environment until demand declines,” Young added. “A new regional normal is a constant threat environment, costly infrastructure diversions and redundancies, asymmetrical violence risk and hardened security surveillance states. Hardly a prescription for growth or trust. Supply shock to price shock to systemic rebalance underway.”

Perspectives

Iranian Official

The Islamic Republic of Iran continues to exercise its sovereign right to control the Strait of Hormuz against repeated U.S. aggression and unauthorized incursions into its territorial waters. Iranian forces have repelled foreign attempts to breach the blockade, including missile strikes on vessels and U.S.-escorted ships, compelling top oil consumers to rapidly drain strategic reserves now at multi-year lows. With ceasefire talks deadlocked by American intransigence, Iran's resistance has exposed the fragility of U.S. energy supplies and global markets.

Israeli

Iran's blockade of the Strait of Hormuz, enforced through direct actions and proxy networks, represents an existential threat to Israel's energy security and survival amid ongoing regional aggression. With U.S. strategic reserves rapidly depleting and ceasefire talks stalled, Israel's defensive necessity demands sustained countermeasures to neutralize these choke-point tactics before prices and supply disruptions trigger wider conflict.

Neutral

ExxonMobil Senior Vice President Neil Chapman stated at an industry conference that oil inventories are approaching historically low levels amid reduced flows through the Strait of Hormuz. He noted that further drawdowns could occur within two to three weeks, after which prices may rise. The United States has released about 50 million barrels from its Strategic Petroleum Reserve since the start of related regional tensions, reducing the stockpile by 12 percent to 365 million barrels.

Western

U.S. forces have conducted precision strikes to neutralize Iranian-backed blockade attempts in the Strait of Hormuz, a critical chokepoint for global energy flows, while guiding commercial vessels to safety amid ongoing threats. With ceasefire talks stalled, rapid draws from the Strategic Petroleum Reserve—now down 12%—have temporarily stabilized markets, though industry leaders warn that unsustainable inventory declines risk sharp price spikes. These operations underscore NATO-aligned efforts to deter aggression and secure maritime routes essential to Western energy security.

Pro-Peace

The prolonged US-Iran conflict has closed the Strait of Hormuz, endangering civilian mariners and commercial crews while driving up global energy costs that threaten food security and livelihoods for millions in vulnerable nations. With ceasefire talks stalled and reserves rapidly drained to blunt price spikes, military actions like missile strikes on vessels only deepen the humanitarian toll. Renewed diplomacy offers the sole path to avert further civilian hardship and economic fallout.

Global South

The closure of the Strait of Hormuz amid stalled US-Iran talks has exposed how Western naval dominance over critical chokepoints undermines the energy sovereignty of Global South importers, who now face forced reserve drawdowns to shield corporate supply chains. US military actions against Iranian enforcement and rapid depletion of its own stockpiles reflect neo-colonial prioritization of Exxon and peers over multilateral resolution, leaving inventories at historic lows. This institutional paralysis risks abrupt price shocks that will strain developing economies long dependent on stable, non-aligned trade routes.

Actors involved

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Sources

  • Jason MaBy Jason Ma

    The two biggest U.S. oil companies joined the growing chorus of voices sounding the alarm on the imminent doom global markets could soon face. With the Strait of Hormuz still effectively closed, top oil-consuming countries have been rapidly draining their reserves, helping keep c

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PARIS: The head of the International Energy Agency said on Tuesday (Jul 21) that renewed fighting in the Mideast increases concerns over energy supplies but that the market still has cushions to absorb the impact. "The escalation in hostilities affecting the Strait of Hormuz and energy infrastructure in the region increases security of supply concerns and uncertainty over the market outlook," IEA Executive Director Fatih Birol said in a statement.

"For the moment, crude oil markets continue to benefit from several cushioning factors," he added, pointing to increased exports from several countries and Saudi and United Arab Emirates oil reaching markets by alternative routes. However, Saudi Arabia's main alternative route of using a pipeline to load tankers in the Red Sea port of Yanbu is under threat as Iran's Yemeni allies, the Houthis, declared they would blockade Saudi Arabia's ports.

Oil markets have for months feared that the Houthis would return to attacking shipping in the Red Sea and Gulf of Aden - as they did during the Gaza war - cutting off yet more crude from global markets. The initial market reaction to the announcement by the Houthis was restrained, however, as Iran indicated that mediation efforts were still underway, calming investor jitters.

"Threats to the Bab el-Mandeb Strait, which has become increasingly important as a route to bypass the Strait of Hormuz, exacerbate these concerns further," said Birol, referring to the narrow passage between the Red Sea and Gulf of Aden. The IEA, in addition to advising its industrialised nation members, also helps them coordinate the release of their strategic oil reserves in reaction to market disruptions.

Birol noted that ongoing government releases from these reserves have provided considerable relief to markets, and that nations continue to hold ample reserves. However, he warned "there is no room for complacency on oil security" and pointed to a drawdown of available commercial inventories, with low refining activity contributing to a tighter supplies of refined oil products like petrol and diesel than for crude oil.

Birol noted that additional supplies of liquefied natural gas from the United States and Canada have offset about 70 per cent of lost supply via the Strait of Hormuz. However, further delays in resuming Gulf exports "will be felt by all LNG importers, including Europe as it looks to refill its gas storage for next winter", he warned.

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DUBAI, United Arab Emirates (AP) — Iran attacked a tanker in the Strait of Hormuz early Tuesday, forcing its crew to abandon the ship, while the United States conducted yet another round of airstrikes targeting the Islamic Republic as they struggle over control of the key waterway.

The 10 consecutive nights of U.S. airstrikes haven’t compelled Tehran to loosen its grip on the strait, through which about a fifth of all crude oil and natural gas traded once passed in peacetime. Even as the U.S. and Iran inch closer to all-out war again, Iran’s interior minister traveled to Pakistan, a key mediator in the conflict, for talks.

However, it remains unclear just what new deal could be reached to end the fighting. The interim deal signed last month that was meant to end the fighting has crumbled. Shipping through the Strait of Hormuz has largely stalled. And as fighting intensifies, both sides have targeted civilian infrastructure relied on by millions of people.

“Iran and groups supportive of Iran may target other U.S. interests overseas or at locations associated with the United States and Americans throughout the world,” the U.S. State Department said in a new warning to Americans. The escalation has pushed oil prices higher in recent weeks.

Benchmark Brent crude traded Tuesday above $88 a barrel and regular gasoline in the U.S. climbed to an average of $4 a gallon, keeping pressure on Americans’ wallets ahead of midterm elections this fall. Meanwhile, the U.S. military identified two soldiers who were killed in Jordan in attacks that left a third person missing.

Separately, the military confirmed another death in Iraq on Saturday during the “controlled detonation” of a downed Iranian drone. President Donald Trump took to social media on Monday to warn that “Every time Iran kills an American Soldier they will pay for that killing many times over!

” Trump was planning to attend a ceremony on Tuesday evening at Dover Air Force Base, where at least one service member’s remains were due to arrive. US strikes come as ships attacked The U.S. military’s Central Command said Tuesday it targeted “Iranian military command centers, maritime capabilities, missile and drone launch sites and air defense systems.

” It released more footage of bombings that targeted sites in Iran. “American forces remain postured and prepared to hold Iran accountable for unwarranted aggression toward civilian mariners seeking to freely and openly transit the strait,” the command said.

Iranian state media reported that explosions were heard in Fars, Hormozgan, Ilam, Kerman and Sistan and Baluchistan provinces. However, traffic through the strait has slowed to a crawl during the latest violence. Lloyd's List Intelligence said only three ships transited the strait on Sunday.

The British military’s United Kingdom Maritime Trade Operations center said a tanker came under attack early Tuesday in the strait off Oman, forcing the crew to abandon the vessel. Iran’s paramilitary Revolutionary Guard claimed the attack, as well as two other attacks on ships Monday in the waterway.

The route around Oman has been the one the U.S. military has encouraged ships to travel to avoid Iran’s control. The UKMTO separately reported Tuesday that another previously unknown attack on a ship took place early the previous day. Tehran also hit U.

S.-allied countries throughout the Middle East. Jordan military's said Tuesday that Iran targeted it with five drones and three missiles, all of which were shot down. Bahrain sounded its missile alert sirens Tuesday afternoon as another Iranian barrage targeted the island kingdom, which is home to the U.

S. Navy's 5th Fleet. Nearly 100 US injuries since early July The Pentagon’s chief spokesperson said nearly 100 U.S. service members have been injured since the U.S. restarted strikes on July 7, and 96% of them have returned to duty.

“The vast majority of injuries experienced were minor concussions,” Sean Parnell posted Monday on X in response to a New York Times report that the Pentagon has withheld information about troop injuries from Iranian strikes. He denied that the Pentagon was hiding data about injuries.

However, the Defense Casualty Analysis System, the military’s clearinghouse for reporting deaths and injuries in conflict, has not been updated as of Monday night with the latest attacks. Yemen rebels threaten attacks on other Mideast waterway Yemen’s Houthi rebels announced a maritime embargo against Saudi Arabia on Monday.

The Houthis, who are backed by Iran, said they would block shipping between the Red Sea and the Gulf of Aden by targeting the Bab el-Mandeb, a maritime chokepoint like the Strait of Hormuz, in response to an attack on Sanaa International Airport last week that they blamed on Saudi Arabia.

With the Strait of Hormuz blocked, Saudi Arabia has been relying on a pipeline to the Red Sea to get millions of barrels of oil out to market. The Houthis earlier demonstrated their ability to disrupt shipping there when they targeted ships for months over the Israel-Hamas war in Gaza, with over 100 vessels attacked.

Saudi Arabia’s military said it would keep the waterway open. “All Houthi threats against transiting vessels will be dealt with swiftly and firmly, as such threats are a blatant violation of international law and fall under acts of maritime piracy,” said Maj.

Gen, Turki al-Malki, a Saudi military spokesman. A glimmer of hope for diplomacy Pakistan has intensified diplomatic efforts in recent days to resuscitate the interim deal. Iranian Interior Minister Eskandar Momeni arrived in Islamabad on Monday for two days of talks with Prime Minister Shehbaz Sharif and others.

On Sunday, U.S. Secretary of State Marco Rubio told reporters that the U.S. is still open to negotiating with Iran but that “it has to be real.” “If the door opens to diplomacy — if the guys that want to do something productive for Iran win and take control of that system, or take control of the negotiations — that’ll be a very positive development,” Rubio said.

“That’s not where we are tonight, unfortunately.” Iranian authorities on Sunday said at least 50 people have been killed and 517 wounded in the latest rounds of U.S. strikes. Since the war began on Feb. 28, 17 U.S. service members have been killed.