Strait of Hormuz still shut, Exxon sees $150 oil coming — load up on Big Oil
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 are about to hit record lows, which could push physical oil prices to $150–$160 per barrel.
Idea
The Strait of Hormuz handles roughly a fifth of all oil traded worldwide, and it's been closed for months. Exxon's own executives are now saying inventories will soon hit all-time lows and that physical oil cargoes could spike to $150–$160 a barrel. Even if a US-Iran ceasefire materializes, one report notes the era of $60 oil may be permanently over because the supply chain damage is already done. Big oil producers like Exxon and Chevron stand to earn windfall profits from inflated prices, and their shares tend to move higher when oil does. The combination of a real physical shortage and rising analyst forecasts gives this trade a strong fundamental tailwind.