The U.S. oil industry has warned the Trump administration that international oil prices could surge in the coming weeks due to the ongoing conflict in the Middle East, according to a report by Politico, citing four oil executives.
The oil industry leaders conveyed this warning to senior White House officials during recent discussions with the Trump administration and the U.S. energy sector. An anonymous oil executive stated, "We are already at dangerously low levels of crude oil inventory," adding, "We have communicated to top government officials what we expect to see around mid to late June." The executive emphasized, "We hope they are paying attention to current crude oil inventories, which are at critically low levels."
Since the U.S. and Israel launched a preemptive strike against Iran in late February, Iran has effectively blocked the Strait of Hormuz, a major global energy transit route, leading to a significant reduction in Middle Eastern energy supplies. Countries have relied on their strategic reserves, but these reserves are now at dangerously low levels.
According to the U.S. Energy Information Administration (EIA), U.S. crude oil inventories fell by 8 million barrels last week, marking the eighth consecutive week of decline and remaining 3% below the five-year average. Additionally, the Strategic Petroleum Reserve (SPR) also decreased by 8 million barrels last week, nearing the low recorded in July 2023, as reported by Politico.
If the decline in crude oil inventories continues at this pace, there is a possibility that international oil prices could spike in June. Last week, Neil Chapman, senior vice president of ExxonMobil, predicted that if the inventory depletion continues, Brent crude prices could rise to $150 per barrel, or even $160, representing an increase of nearly 70% from the current futures price of around $95. He noted, "There is debate about whether that depletion point will be in two weeks or three weeks, but once we reach that point, prices will surge."
However, the White House has stated that it has not received such warnings from the oil industry, and a U.S. Department of Energy official denied having had "such discussions" regarding crude oil inventories. Nonetheless, another oil executive countered, stating, "The government has already heard about these issues related to oil."
The decline in crude oil inventories is affecting not just the U.S. but the global market as well. Current global crude oil inventories are approximately 7.5 billion barrels, down about 500 million barrels compared to pre-war levels in the Middle East. However, most of these stocks are already allocated to buyers and are not held as reserves, according to Jim Burkhard, vice president and global head of oil research at S&P Global. He remarked, "I have never seen inventory levels decrease so quickly and so significantly," noting that some regions have already reached or are nearing their lowest inventory levels.
Meanwhile, President Trump indicated that "final negotiations are underway to end the Iran war," suggesting that a peace agreement with Iran could be reached soon.
* This article has been translated by AI.
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