Global oil inventories are set to fall dangerously low as an agreement to reopen the Strait of Hormuz cannot be reached, and industry executives and analysts warn of the possibility of another oil price shock in the coming weeks, which could be severe enough to cause turmoil in broader financial markets.
Some fear that the next rise in oil prices could pose a risk to economic growth, bond yields and the stock market.
“We’re approaching unprecedented levels of inventories,” Neil Chapman, ExxonMobil’s senior vice president, said during a Bernstein conference in New York on May 28. “I mean, actually, they’re very low levels. You can have a debate about whether inventories are going to get to those very low levels in two or three weeks. But once you get to that point, you’re going to see a sharp rise in prices.”
