Oil Could Spike to $140 With Hormuz Closed
SkimNews Take
The sudden, non-linear price jump from a Hormuz shutdown suggests that the global oil supply chain, while diversified, remains vulnerable to single points of failure that can trigger disproportionate market reactions.
Get the Energy newsletter
Daily energy & climate — solar, EVs, oil, the policy fights and tech bets shaping the transition. Free.
- Capital Economics warned that OECD oil stocks could reach critically low levels by end of June if the Strait of Hormuz stays closed, with Hamad Hussain estimating Brent crude could top $130-$140 a barrel next month and reach an all-time nominal peak
- Brent crude futures gained more than 3% on Friday to close at $109.26 a barrel after China's trip with Trump produced no breakthrough to pressure ally Iran into normalizing tanker traffic
- The IEA reported that 164 million barrels have been released by governments and industry as of May 8, warning 'rapidly shrinking buffers amid continued disruptions may herald future price spikes ahead'
- JPMorgan predicted commercial oil inventories in the developed world could 'approach operational stress levels' by early June, while Saudi Aramco said global gasoline and jet fuel could reach 'critically low levels' before summer
- An estimated 1 billion barrels of oil has already been lost to the conflict, dwarfing the IEA's planned total release of 400 million barrels, and some Asian countries have already imposed fuel rationing
- UBS warned that oil inventories are approaching record lows with buffers 'largely exhausted,' highlighting the 'risk of panic buying if physical dislocation intensifies and the Strait of Hormuz remains closed'
Why it matters: With roughly 1 billion barrels already lost—far exceeding the IEA's 400-million-barrel planned release—and OECD stocks projected to hit critical lows by June, consumers and Asian economies already rationing face the prospect of $130-$140 Brent crude and a disorderly, non-linear price spike rather than a gradual climb if the strait stays closed.
