Oil Prices Soar Amid Low Inventories and Strait of Hormuz Tensions

The oil market is experiencing increased volatility due to escalating tensions in the Strait of Hormuz. According to Neil Chapman, Senior Vice President of ExxonMobil, global crude and fuel inventories are approaching unprecedented lows, potentially driving dated Brent prices higher.

Brent crude futures expiring in July have risen by nearly 3%, trading at around $93.59 a barrel, while WTI crude futures expiring in June are about 3.01% higher, trading at around $90.02 a barrel.

Chapman warned that when inventories reach critically low levels, dated Brent prices could shoot up to $150 or $160 per barrel. Chevron CEO Mike Wirth agreed with this assessment, pointing to rapidly depleting strategic reserves amid the U.S.-Iran war and Strait of Hormuz blockade.