Brent may surge to $150 as inventories collapse, Hormuz stays shut

Global oil markets are facing a severe disconnect between futures trading and physical supply, with inventories plunging to multi‑decade lows. 

Analysts warn Brent could spike to $150–$160 per barrel within weeks if the Strait of Hormuz remains blocked, while ING’s Warren Patterson stresses that disruptions lingering into the third quarter could drive prices higher.

After having dipped more than 3% in the previous session, Brent crude oil remained highly volatile, swinging between negative and positive territories on Wednesday.

The contract was last at $91.30 per barrel, down 0.2% from the previous close. 

The price of West Texas Intermediate crude oil was at $88.16 per barrel, largely unchanged from Tuesday’s close. 

Futures market diverges from reality

Oil futures have been guided largely by sentiment and hopes of a US–Iran peace deal, but the physical market tells a different story. 

According to OilPrice.com, around 13 million barrels per day of supply has been wiped out due to the closure of the Strait of Hormuz.

Despite this, traders continue to bet on a quick resolution, keeping futures prices subdued.

In reality, global oil inventories are being depleted at a record pace.

Governments have drawn down strategic reserves to offset lost supply, while US fuel stocks have fallen to their lowest levels since 2004. 

The International Energy Agency reported that global inventories fell by 250 million barrels in March and April, equivalent to 4 million barrels per day.

Neil Chapman, Exxon’s Senior Vice President, warned at the Bernstein 42nd Annual Strategic Decisions Conference at the end of May. 

Chevron CEO Mike Wirth also noted in the same conference; “The buffers and the shock absorbers are being steadily drawn down over the next few weeks, we’re likely to see those pressures flow through more directly to physical prices.”

Inventories at critical lows

US crude and petroleum product stocks plunged to 1.53 billion barrels as of May 29, the lowest weekly ending stocks since 2004. 

Gasoline inventories are sliding, and Cushing, the delivery hub for WTI futures, is also running low.

Analysts caution that demand destruction may be the only factor preventing an immediate price spike, but this buffer is limited.

Even if the Strait of Hormuz reopened today, cargoes would take weeks to reach buyers, leaving a supply gap at the start of the peak summer demand season. 

China has helped cap prices by drawing down its massive reserves, estimated at more than 1.2 billion barrels, but these buffers are finite.

Expert commentary from ING

Warren Patterson, head of commodities strategy at ING Economics, highlighted the risks of prolonged disruption. 

He also noted the difficulty of achieving a sustainable ceasefire: “This once again demonstrates the difficulty Iran and the US face in working towards a sustainable ceasefire that allows for the free flow of vessels through the Strait of Hormuz.”

Patterson pointed out that aggregate open interest in Brent on the Intercontinental Exchange has fallen to its lowest level since August 2025, reflecting traders’ caution amid headline‑driven volatility.

Outlook

The oil market is approaching a tipping point.

Inventories are at critically low levels, strategic reserves are being drained, and supply disruptions show no sign of easing. 

Analysts from Exxon, Chevron, and ING warn that prices could surge sharply in the coming weeks, particularly if disruptions extend into the third quarter.

For now, futures markets remain disconnected from physical realities, but as buffers erode, traders may be forced to confront the scale of the supply crisis. 

The risk of Brent spiking to $150–$160 per barrel is no longer theoretical it is becoming increasingly likely unless a breakthrough in US–Iran negotiations restores flows through the Strait of Hormuz.