The global energy market is entering a critical phase. The price of the North Sea Brent crude oil blend confidently surpassed the $85 per barrel mark during trading on Wednesday, while the US benchmark WTI rose above $80. Both key indices have been demonstrating a steady upward trend for the third consecutive day.
The main catalyst for this rally is not so much short-term speculation, but a fundamental shift. The ongoing hostilities between the US and Iran in the Strait of Hormuz area pose a real threat to global supply chains. However, as professional traders note, the current panic is caused not by price fluctuations, but by the critically low volume of spare production capacity capable of compensating for potential future disruptions.
The Strategic Buffer is Nearly Exhausted
Analysts are closely monitoring the state of the US Strategic Petroleum Reserve (SPR). This "safety margin," which for several months allowed offsetting supply disruptions, is almost completely depleted. During the conflict, Washington has repeatedly released oil from the reserve onto the market to curb price spikes. If Washington and Tehran continue on the path of escalation rather than seeking compromise, oil could sharply increase in price.
The risk is recognized at the highest level. At the G7 meeting, the option of releasing up to 400 million barrels from reserves onto the market amid past sharp spikes was discussed. Top managers at ExxonMobil have also warned that global oil reserves are rapidly shrinking.
Trump Hardens Rhetoric, Shipping Paralyzed
US President Donald Trump raised the stakes, stating that strikes on Iran could intensify next week. Among the possible targets are power plants and bridges, if Tehran does not return to negotiations. Iran, for its part, does not rule out imposing its own fees on vessels passing through the Strait of Hormuz.
Shipping companies have quickly responded to the increased military risks. According to data from the analytical platform MarineTraffic, only 57 vessels passed through the strait over the past weekend — a twofold decrease in business activity compared to the previous week. For comparison: before the active phase of hostilities began in February, daily traffic amounted to about 130 large-tonnage vessels.
Wall Street Prices in Oil at $100
Bart Melek, head of commodity market strategy at TD Securities, believes that a move to $100 is "quite possible if it becomes evident that an oil deficit is a real and growing risk." The US Department of Energy, however, disagrees with the thesis of a deficit, stating that on the eve, with military support, 8.5 million barrels of oil passed through the strait — a normal volume of supplies.
The rise in oil prices could complicate the inflation situation. Earlier, analysts expected the June CPI report to record a further slowdown in price growth, facilitated by lower fuel costs. Now, the dynamics will depend on Trump's next steps and Tehran's decisions regarding further negotiations.
Expert opinion: The market underestimates the speed at which the "safety cushion" in the form of the SPR is running out. Even if current supply volumes through Hormuz remain normal, the psychological effect of the depletion of reserves and the threat of a blockade is already priced into the risk premium. If the conflict enters a phase of full-scale naval blockade, we will see oil at $100 sooner than many expect. This would be a serious blow to crypto markets, which have so far remained on the sidelines of this turbulence.