Gotrade News - Brent crude climbed 1.24% to $110.62 a barrel as the Strait of Hormuz remained shut amid escalating Iran tensions. WTI rose 1.75% to $107.26, extending a weekly rally that pushed both benchmarks sharply higher.
Global oil reserves have fallen to 7.8 billion barrels, with projections pointing to 7.6 billion by month-end. Traders are pricing in sustained supply risk as US-Iran negotiations stall and military options resurface.
Key Takeaways
- Brent rose to $110.62 and WTI to $107.26 as Hormuz closure persists into a critical phase.
- Global reserves dropped from 8 billion to 7.8 billion barrels, heading toward 7.6 billion by late May.
- Energy majors including Exxon Mobil (XOM) warn of further price increases if the strait stays closed.
Reserves Slide Toward Critical Threshold
According to Kompas.com, global oil reserves dropped from 8 billion barrels in late February to 7.8 billion by late April. Only around 800 million barrels remain usable without straining global supply chains.
The International Energy Agency warned that rapidly depleting reserves amid ongoing disruptions could signal future price spikes. UBS analysts project reserves may fall to 6.8 billion barrels if the strait remains closed through September.
Rapidan Energy estimates that fuel product inventories could hit critical levels by July or August. The firm cited refining bottlenecks and limited rerouting capacity as key risks for downstream markets.
ExxonMobil CEO Darren Woods said the company expects continued market price increases if reserves drop further. His remarks underscore how major producers like Chevron (CVX) are positioning for prolonged disruption.
Geopolitical Triggers Keep Risk Premium Elevated
As reported by KabarBursa.com, a drone attack on a UAE nuclear facility intensified regional anxiety this week. Stalled US-Iran talks have prompted President Trump to weigh additional military options.
Brent gained $1.36 in the latest session while WTI added $1.84, extending Friday's momentum. Traders cited the combination of shipping risk and shrinking inventories as the dominant pricing factors.
Per IDXChannel, Brent futures closed Friday at $109.26, up 3.35% on the day. WTI futures settled at $105.42, up 4.2%, capping a volatile session for global energy markets.
Brent gained 7.8% for the week while WTI surged 10.5%, reflecting one of the sharpest weekly moves of the year. Analysts now see a near-term range of $93 to $107 per barrel before further direction emerges.
Global reserves have fallen by 246 million barrels since the Iran conflict began. The drawdown pace exceeds typical seasonal patterns and points to structural rather than cyclical pressure.
Investors tracking energy equities are watching producers with Permian and offshore exposure for relative resilience. The United States Oil ETF (USO) remains a direct way to express views on crude price trajectory.
Refiners face margin compression as feedstock costs rise faster than product pass-through. Inventory ratios across OECD economies are tightening at a pace last observed during prior supply shocks.
If diplomacy fails and the strait stays shut through the third quarter, base-case forecasts shift sharply higher. Markets are increasingly pricing tail risk into both futures curves and options skew.
