The Countdown to a Major Oil Price Surge Has Begun
The Countdown to a Major Oil Price Surge Has Begun
- Commercial oil inventories are plummeting at an alarming rate as supply losses mount from the Strait of Hormuz closure.
- The world is on the brink of breaching operational inventory thresholds, risking severe supply chain strain, spikes in volatility, and imminent fuel shortages.
- Markets dangerously underestimate the crisis, leaving oil prices extremely vulnerable to a sudden, dramatic spike.
In the coming weeks, readers will increasingly see two rarely used phrases in stories covering our dwindling worldwide oil inventories: "operational minimum" and "tank bottoms." The phrases more or less signify the same thing, though the former is more abstract and precise, while the latter is more visual. They signify rapid depletion of existing oil inventories and presage price spikes to come due to the loss of oil supplies from the Persian Gulf because of Iran's closure of the Strait of Hormuz, the maritime artery through which 20 percent of the world's oil previously flowed. Read More