The tanks in Cushing, Oklahoma, are hitting bottom. The oil market is about to hit a tipping point

Key Points:

• Cushing, Oklahoma, known as the pipeline crossroads of the world, is a critical hub for America's oil market, storing and pricing the benchmark West Texas Intermediate oil and supplying refineries nationwide.
• Cushing's oil inventory has dropped to 21.6 million barrels, nearing the operational stress threshold of 20 million barrels, which could disrupt supply and cause significant market volatility if reserves run empty.
• The depletion is driven by increased US oil demand as a substitute for Middle Eastern supplies amid the Iran war, with US diesel and gas stocks also falling to historically low levels.
• Experts warn that if oil inventories continue to decline, the market may face extreme price volatility and potential spikes in oil prices to $140-$160 per barrel or even higher, with gasoline prices possibly exceeding $5 per gallon.
• Potential solutions include an export ban to preserve domestic supplies or allowing market forces to drive prices up, but both carry risks of higher prices and economic disruption if the supply situation is not resolved soon.