Exxon says oil inventories about to run dry — load up on Big Oil before prices spike
The Strait of Hormuz — the world's most important oil shipping lane — has been shut down since the Iran war began in February. Now Exxon is warning that global oil stockpiles will soon hit critically low levels, which could push physical oil prices to $150–160 a barrel.
Idea
The Strait of Hormuz closure has choked off the flow of roughly 20% of the world's oil for months. Exxon's own executive is now publicly warning that inventories will soon reach all-time lows, which could force Brent crude to $150–160 per barrel. Even if a US-Iran ceasefire materializes soon, analysts say the era of cheap oil is over because the supply damage is already done. Oil majors like Exxon and Chevron stand to reap windfall profits as the price they get for every barrel climbs, and their stock prices tend to track oil's direction with leverage. This is a classic supply-crisis tailwind for Big Oil.