The oil industry has warned the Trump administration of an impending global energy price surge due to critically low inventories, with executives citing the closure of the Strait of Hormuz as a primary factor. Four industry executives have privately briefed senior White House officials and Cabinet members, expressing concerns that inventories are at "dangerously low levels" and could trigger a price spike in mid-to-late June. A White House official denied receiving such warnings, stating that anonymous sources were incorrect.
Global inventories have been depleted as countries rely on stored oil and fuel to compensate for disrupted Middle Eastern supplies. The Strait of Hormuz, a critical trade route for 20% of the world’s crude oil, has been effectively closed since U.S. and Israeli military strikes three months ago. Commercial stockpiles now provide only a 2.3-day cushion above normal consumption, according to JPMorgan, while government-managed reserves remain a key concern. Chevron and Exxon have drained their reserves to historic lows, further tightening supply.
Even if the Strait of Hormuz reopens immediately, experts warn that gasoline prices will likely rise. AAA reports the average U.S. gasoline price at $4.21 per gallon, down slightly from recent weeks but significantly higher than last year’s $3.14. Jim Burkhard of S&P Global Energy noted that inventories have been effective shock absorbers but are now diminishing. U.S. Energy Information Administration data shows increased reliance on stored fuel as Middle Eastern supplies dwindle.
The crisis extends beyond oil, affecting liquefied natural gas and petrochemicals. Nearly 90% of typical Persian Gulf exports have been disrupted, with remaining shipments rerouted through Saudi, Emirati, and Turkish pipelines. Tanker delays mean that even if shipments resume, it could take weeks or months for supplies to reach destinations. Production growth has stalled, with U.S. shale deposits depleting, further straining global reserves.