Analysts and oil executives are warning that global crude inventories have fallen to dangerously low levels, tempering market optimism over a potential U.S.-Iran peace deal. Even if the Strait of Hormuz reopens, production and exports would not rebound immediately, and the world has been drawing down storage to cover demand during the crisis. Chevron CEO Mike Wirth said upward pressure on physical prices is likely through June and July, while Exxon senior VP Neil Chapman described inventory levels as approaching unheard of, really low levels that could cause prices to shoot up once a minimum operational threshold is reached. U.S. crude inventories have dropped by 52 million barrels over the last nine weeks, with Cushing reserves down to about 21 million barrels, near the point where tank operators face operational complications. Insurers and shipowners remain cautious, with Oil Brokerage Ltd.'s global head of shipping research noting that no big shipowners are changing their stance without clarity on the agreement's terms.
Chevron CorpCEO warns of upward price pressure due to critically low inventories.
Exxon Mobil CorpSenior VP describes inventory levels as 'unheard of, really low', likely causing price spikes.