The global energy market is entering a critical phase. During trading on Wednesday, the benchmark North Sea Brent crude firmly settled above the psychological level of $85 per barrel. Meanwhile, the American WTI crude surpassed the $80 mark. The rally continues for the third consecutive day, driven by fundamental factors rather than mere speculative trading.
The primary driver of the rally is the escalation of the conflict between the US and Iran in the Strait of Hormuz region. However, as experienced traders note, the current volatility is just the tip of the iceberg. The main cause for concern lies in the catastrophic reduction of the global buffer of spare production capacity. The reserve that for years allowed the market to compensate for any supply disruptions is nearly exhausted.
The margin of safety is melting before our eyes
Attentive observers, including a senior analyst at Sparta Commodities, are noting an alarming trend: the US Strategic Petroleum Reserve (SPR), which Washington actively used throughout the conflict to curb price spikes, is almost completely depleted. Each time hostilities intensified, part of the reserves was released into the market. If the US and Iran continue on a path of escalation rather than seeking compromise, oil could sharply rise in price.
Earlier, at the G7 meeting, a scenario of an emergency release of up to 400 million barrels from reserves was already discussed. ExxonMobil's top management also warned that global reserves are shrinking at an alarming rate. The current situation only confirms these forecasts.
Trump links strikes to lifting the blockade
US President Donald Trump has raised the stakes. In a recent interview, he stated that strikes on Iran could become significantly more intense next week. Potential targets include power plants and bridges if Tehran does not return to the negotiation process. Iran, in turn, does not rule out imposing its own fees on vessels passing through the Strait of Hormuz.
Notably, Trump changed his stance on another issue: he abandoned plans to impose a 20% fee on cargo passing through the strait. Instead, according to him, Gulf countries will offer trade and investment agreements. On the same day, the US resumed a naval blockade of Iranian ports. Shipping companies reacted instantly: over the past weekend, only 57 vessels passed through the Strait of Hormuz—half as many as the week before and more than double the decline from the daily traffic of 130 large-tonnage vessels before the active phase of hostilities began in February.
Wall Street prices in oil at $100
Leading investment banks are already revising their forecasts. The head of commodity strategy at TD Securities believes that a move toward $100 per barrel is not fantasy but a very real scenario if it becomes evident that an oil deficit is a growing and tangible risk.
The US Department of Energy, however, is trying to calm the market, stating that the day before, with military support, 8.5 million barrels passed through the strait—consistent with normal supply volumes. Yet, trust in these statements is undermined by the sharp decline in overall shipping traffic.
The rise in oil prices could seriously complicate the inflation situation. Previously, analysts expected the June CPI report to show further slowing of price growth due to lower fuel costs. Now, the dynamics will directly depend on Trump's next moves and Tehran's decisions.
Cryptalist expert opinion: The market underestimates the speed of SPR depletion. If the conflict drags on, we will see not just a speculative rebound but a structural supply default. For crypto investors, this is a signal to reassess risks: oil rising above $90 will trigger a new wave of inflation and a tightening of the Fed's monetary policy, putting pressure on risky assets, including Bitcoin.