Exxon warns oil inventories will hit dangerously low levels due to Iran war
CNBC • • business
Key Points:
- Exxon Mobil warned that oil inventories will drop to record low levels in the coming weeks, which will cause prices to spike and reduce demand, according to Senior Vice President Neil Chapman.
- Chapman predicted that physical Brent oil cargo prices could surge to $150-$160 per barrel when inventories reach all-time lows, triggering demand destruction to rebalance the market.
- Brent futures for July delivery closed under $94 per barrel amid hopes for a U.S.-Iran settlement to reopen the Strait of Hormuz, which Iran has closed, causing the largest oil supply disruption in history.
- The International Energy Agency (IEA) has noted record depletion of oil inventories and coordinated a release of 400 million barrels to mitigate the supply disruption caused by the Middle East conflict.
- Industry leaders emphasize that the current crude futures market does not fully reflect the severity of the supply disruption, and once inventories hit minimum levels, prices are expected to rise sharply.