Energy executives and analysts are warning that oil and gas prices will likely rise significantly as reserves deplete and the Strait of Hormuz remains closed.
The price of Brent crude futures was $98.20 US a barrel midday Wednesday. But experts say it could balloon to $150 US or more in the coming weeks, largely due to fading hopes for a U.S.-Iran deal to reopen the Strait, as well as unchanging demand in some markets as reserves are quickly running dry.
“We’re approaching unheard-of inventory levels,” Neil Chapman, an ExxonMobil senior vice-president, told a conference in New York last week.
“You can debate whether it’s going to hit those really low levels in two weeks or three weeks. But once you get to that point, then you’ll see [the] price shoot up.”
Chapman said the price could go up to $150 US to $160 US in that time frame.
In an interview with the Bloomberg Talks last week, Chevron CEO Mike Wirth also expressed concern about reserve levels.
“We are steadily drawing inventories down on products, on crude, in locations around the world,” he said, mentioning that inventories could bottom out “before long.”
“I think June and July are going to be critical months.”
Reserves running low
In response to the conflict in the Middle East, 32 members of the International Energy Agency agreed in March to release 400 million barrels of oil from their emergency reserves.
The U.S. Strategic Petroleum Reserve is at 357.1 million barrels of oil as of May 29, according to the Department of Energy’s latest report, more than 50 million barrels lower than before the war in February 2026. It’s the lowest level since December 2023, and approaching numbers from the early 1980s, just after the reserve was created, when it was still filling up.
Chevron’s Wirth stopped short of calling the situation a crisis, but said the market is in a difficult position.
“The inertia in the system is very, very strong, and turning that is not easy.”
U.S. President Donald Trump has repeatedly suggested that his country and Iran are close to a deal to reopen the Strait of Hormuz, through which around 20 per cent of the world’s oil is shipped. Iran has disputed those claims, and the Strait remains closed to the vast majority of commercial shipping.
The war, which the U.S. and Israel started in February, has shown few signs of abating. On Wednesday, Iran fired missiles at U.S. military bases in the Gulf region, which the U.S. said had failed. Oil prices rose following the news.
Al Salazar, head of macro oil and gas research at Calgary energy analytics firm Enverus, called the situation “mind-numbing” and “frustrating” as the price of oil hasn’t matched the circumstances.
“We concur with what the Exxon and Chevron executives are saying — we think the price should be higher; we think it’s artificially low,” he said. “If you twist my arm, I think we’re probably $20 [US] below where we should be on Brent.”
Heather Exner-Pirot, energy director at the Ottawa-based…
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