"Frederic Lasserre, head of analysis at commodities trading giant Gunvor Group, stated that if the closure drags on for another month, oil markets will effectively run out of stockpiles and hit 'tank bottoms.'"
"Analysts at JPMorgan indicated that oil inventories in OECD countries will hit 'operational minimums' between May 9 and May 30, leading to exponential price increases."
"Iran is reportedly putting old tankers back into service to act as floating storage and has explored shipping supplies by rail to China."
"For now, oil futures have not reached worst-case scenarios of $150-$200 a barrel, with West Texas Intermediate hovering around $102."
The closure of the Strait of Hormuz has led to rapidly depleting oil inventories among major consuming countries. Analysts predict that if the situation continues, oil markets could hit critical low stockpiles. Concurrently, Iran's oil exports are bottlenecked by a U.S. naval blockade, causing its inventories to rise. Iran is attempting to mitigate this by reducing crude output and utilizing old tankers for storage. Both regions face a pressing timeline to address their respective oil market emergencies.
Read at Fortune
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