Exxon VP: Oil stocks near critical lows; Brent may hit $150

ExxonMobil senior vice president Neil Chapman warned at a Bernstein investor conference that global oil inventories are headed for critically low levels within weeks and that Brent crude could rise to $150–$160 per barrel if physical supply does not rebound. Chapman projected shortages could become disruptive in two to three weeks at current drawdown rates.

Chapman’s assessment draws on ExxonMobil internal models that show tightening inventories and rising competition for available cargoes. He commented that markets are moving toward “unheard of” inventory levels and that steep upward price pressure is possible as physical buyers compete for scarce crude.

The International Energy Agency recorded an observed drop of roughly 246 million barrels in global oil stocks during March and April. Market estimates attribute the acceleration in drawdown to shipping disruptions in the Strait of Hormuz, which have removed about one-fifth of global oil flows. Some market participants estimate cumulative supply losses tied to the Hormuz disruption could exceed one billion barrels by month-end.

Traders report that the futures curve is not fully reflecting current physical tightness. Price differentials between crude grades have widened and margins for refined products have risen, which traders cite as signs of strain in the physical market.

Government withdrawals from strategic reserves and official stockpile sales have reduced headline inventory falls, but private-sector tanks and pipeline inventories have thinned faster. Analysts at HFI Research wrote that commercial storage is roughly 9 million barrels above a level they describe as the equivalent of “living paycheck to paycheck” for gasoline and distillate and estimated two to three weeks before that buffer could be exhausted, around mid-June.

Market participants expect shortages to appear first as regional gasoline tightness during peak summer driving and as pressure on distillate supplies ahead of hurricane season. Even a modest additional supply loss could push spot markets to scramble for cargoes, lifting physical crude prices before futures markets fully reprice the risk.

Higher crude prices lift inflation expectations and can complicate central bank decisions, market analysts note. Investors have reallocated some portfolios toward energy equities amid weakening supply visibility. Analysts caution that if Brent moves above $150, the most likely route back to balance would be a reduction in demand unless physical supply is restored quickly.

The current situation centers on the Strait of Hormuz disruptions, deep inventory draws and thinning commercial storage, with traders and oil companies monitoring cargo availability and refining margins for further signs of stress.