Global oil inventories have been significantly drawn down during the 15-week disruption, approaching dangerously low levels. The U.S. Strategic Petroleum Reserve has released 66 million barrels, and commercial stocks in Cushing have fallen to 21 million barrels. Energy executives warn that it will take several months for inventories to return to normal levels, and uncertainties remain regarding actual navigation resumption and subsequent negotiations, leaving energy crisis risks still present.
The U.S.-Iran agreement paves the way for the reopening of the Strait of Hormuz, but whether this can timely halt the accelerating drawdown of global oil inventories will determine energy price trends in the coming weeks.
According to an article by Wall Street News, both the U.S. and Iran simultaneously announced the conclusion of a memorandum of understanding on a ceasefire. Trump authorized the 'free opening' of the Strait of Hormuz and lifted the naval blockade, with the formal signing ceremony scheduled for June 19 in Switzerland.
However, according to the latest report from The Wall Street Journal, energy industry executives have issued warnings: over the more than 15-week blockade period, the world has already drawn down hundreds of millions of barrels from both strategic and commercial reserves. Inventories are now approaching historically dangerous lows, and even if the strait reopens immediately, it will take months for the market to return to normal.
Multiple industry executives described the situation as severe. Neil Chapman, Senior Vice President of Exxon Mobil, stated that the U.S. is approaching 'unprecedented inventory levels.' Chevron CEO Mike Wirth has repeatedly warned publicly that supply shortages will soon become evident globally.
Both Strategic and Commercial Reserves Are Running Dangerously Low
Since late March, the U.S. has withdrawn approximately 66 million barrels of crude oil from the Strategic Petroleum Reserve (SPR). The SPR is a salt-cavern storage system located along the Gulf of Mexico coast, established after the 1975 Arab oil embargo, and reached a peak capacity of over 700 million barrels in 2009.
The Trump administration has authorized the release of 172 million barrels. According to The Wall Street Journal, if withdrawals continue at the current pace, this allocation could be exhausted as early as early September. At that point, SPR inventories would fall to around 243 million barrels—an all-time low.
This figure is significant not only in absolute terms. The core function of the SPR is to provide the U.S. with a buffer against sudden supply disruptions or natural disasters such as hurricanes. Once reserves are substantially depleted, the U.S. will have far less flexibility to respond to future energy crises.
Commercial storage facilities are under similar pressure. Inventories at Cushing, Oklahoma—the key pricing hub for U.S. crude oil—have fallen to 21 million barrels, declining by approximately 1 million barrels in the past week alone.
John Auers, Managing Director of Refined Fuels Analysis at RBN Energy (a subsidiary of Novi Labs), noted that storage tanks typically need to maintain 10% to 15% of their capacity to operate normally—due to physical constraints such as outlet placement and sediment accumulation at the tank bottom. When Cushing inventories drop to around 20 million barrels, operators will begin encountering operational challenges.
"Once the tank hits bottom, the entire operation will grind to a halt," said Auers. He added that the 20-million-barrel level is not an absolute hard red line, and operators might still attempt to keep drawing oil, albeit at a significantly slower pace.
Statements by U.S. energy executives have been pessimistic.
The report noted that, in light of the above situation, statements by several energy industry executives were far more pessimistic than those of government officials.
At an industry conference in New York, Neil Chapman stated: "You can debate whether this tipping point arrives in two weeks or three, but once it does, prices will surge sharply."
Wil VanLoh of Quantum Capital Group was even more blunt: "Things are going to get ugly." He added, "The world has never before seen a single-day loss of 10 million barrels of oil demand"—a figure referring to crude output rendered inaccessible to global markets due to the strait closure.
Chevron CEO Mike Wirth expressed skepticism about Energy Secretary Chris Wright’s claim that "7 million barrels per day of oil and petroleum products are still transiting the strait with U.S. military assistance." "Our assessment is that the actual volume may not be that high," he said.
Additionally, according to reports, U.S. Energy Secretary Chris Wright stated last week that Trump had been briefed on the inventory situation and that the administration does not expect a significant spike in energy prices. "I don’t think so... We’re facing challenges, but I believe we’re addressing them," he said.
White House spokesperson Taylor Rogers stated: "As the president drives this conflict toward a successful resolution, oil prices will fall back to multi-year lows, and global energy markets will become more stable over the long term."
However, the report also noted that the agreement itself remains subject to considerable uncertainty. Trump indicated that the strait would not reopen until confirmation that mines have been cleared. Tanker operators and their insurers are expected to remain cautious about resuming transit.
More importantly, this agreement merely establishes a framework for subsequent, more difficult nuclear negotiations. The core U.S. demand—that Iran either surrender or dilute its stockpile of highly enriched uranium—has yet to be resolved. Without tangible progress on the nuclear issue, long-term security assurances for the strait will remain in doubt, and uncertainty in the oil market will persist accordingly.