The oil market is facing a critical juncture, with warnings that it is merely four weeks away from a tipping point that could send prices soaring. Donald Trump has informed oil company executives that the blockade of the Strait of Hormuz could persist for months, escalating fears that global stockpiles might fall below essential thresholds.
Analysts Warn of Critical Stock Levels
Analysts are concerned that reserves of crude oil, gasoline, diesel, and jet fuel could plummet to dangerously low levels by the end of the month, triggering a sharp increase in prices. Frederic Lasserre, head of research at Gunvor, a major global oil trader, told the Financial Times: "We do not have months. It goes beyond gasoline at the pumps to industry shutting down and you enter recession. The tipping point is clearly June. This is the point at which something has to give."
Potential Price Surge
Amrita Sen, founder of Energy Aspects consultancy, echoed these sentiments, stating that if the conflict continues until the end of June, all stockpiles would be exhausted. "Essentially you can pick a number when it comes to the oil price. We will just not have any buffers," she said. The price of a barrel of oil has already reached $126 this week, but experts warn it could climb to between $150 and $200 if the conflict persists.
The dire warnings come amid ongoing Israeli airstrikes in southern Lebanon, despite a ceasefire agreement with Hezbollah. Officials reported at least seven fatalities and numerous injuries from recent strikes. The Israeli military issued fresh evacuation warnings for residents of nine southern villages.
Israel and Hezbollah have continued their hostilities despite a ceasefire that has been in place since April 17. Lebanon's state-run National News Agency reported an airstrike on a car in Kfar Dajal killed two people, while another strike on a home in Lwaizeh killed three. Two more were killed in Shoukin. The Israeli military's Arabic-language spokeswoman, Lt. Col. Ella Waweya, stated on X that the air force conducted approximately 50 airstrikes over the past 24 hours targeting Hezbollah infrastructure and members.
Hezbollah claimed to have attacked Israeli troops with a drone in the coastal village of Bayed. Over recent weeks, the Israeli army has been levelling neighbourhoods near the Lebanese-Israeli border, destroying buildings allegedly used as outposts by the Iran-backed group.
The Israeli military released a video purportedly showing Hezbollah positions in southern Lebanon being demolished, including a soccer stadium in Bint Jbeil that was said to be booby-trapped. Lebanon and Israel have held their first direct talks in over three decades, though they remain formally in a state of war since Israel's founding in 1948. A 10-day ceasefire declared in Washington took effect on April 17 and was later extended by three weeks.
