“You’re reaching the bottom of the tank.” That’s the phrase one oil executive used to describe the state of global oil stocks, which the executive said had already been relayed to senior officials in Washington. The same person gave it an unusually specific time frame: mid-to-late June, according to the word E&E News.
The White House’s response was immediate and direct.
“Politico’s anonymous sources are wrong,” a White House official said, while an Energy Department official added that there had been no such discussions about stockpile levels, E&E News reported.
Four oil executives told Politico that the opposite is true, and at least two of them have already issued similar warnings.
Data on oil reserves show the sharpest drop in decades
The dispute goes back to the Strait of Hormuz, which Iran effectively closed after US and Israeli strikes that began on February 28.
About one-fifth of the world’s oil reserves normally pass through the strait. The stock drawdown has been going on since the first weeks of the crash, when the world was already burning stocks of 7.1 million barrels per day.
Global oil inventories now stand at about 7.5 billion barrels, down about 500 million barrels at a rate of about 5.8 million barrels a day since the conflict began, according to Jim Burkhardt, vice president and global head. crude oil a study by S&P Global Energy cited by E&E News.
Much of that oil already has buyers and is not held in reserve, Burkhardt said, and inventories in some regions could reach operating lows.
More oil and gas:
On the U.S. side, gasoline inventories fell by 47.5 million barrels from the beginning of February to the end of May, the sharpest drop in weekly EIA data from February to May since 1990. OilPrice.com.
The next largest recorded February-to-May drawdown was about 30 million barrels 15 years ago. U.S. commercial crude inventories fell by 8 million barrels individually in the past week, the eighth straight weekly decline, leaving inventories about 3% below their five-year average.
What does “tank bottom” mean for the strategic reserve
The strategic oil reserve took a large part of the load. SPR Inventories fell by 9.1 million barrels in one week to 36.2 million barrels below last year’s level, with the recent drawdown being the SPR’s biggest weekly draw on record, according to OilPrice.com.
Current SPR reserves of approximately 357 million barrels are well below maximum capacity of approximately 725 million barrels.
“I’ve never seen inventory numbers drop so fast,” Burkhardt said. “It’s mind-blowing.” His broader point was that the inventory cushion is the reason prices haven’t risen yet. “What has been remarkable is that prices haven’t moved higher so far, and a big reason for that is lower inventories around the world.” Burkhardt said. “But it can’t go on forever.”
Exxon and other oil companies are warning of oil prices between $150 and $160
What sets this warning apart from typical anonymous stories is that the same concern is now being publicly voiced by named executives at major companies.
Exxon Mobil Senior Vice President Neil Chapman told an investor conference that benchmark Brent crude could reach $150-$160 a barrel if inventories continue to decline. That comment was suggested when Exxon management first framed the decline in reserves not as a forecast, but as something the models predicted would happen after the reserves were depleted.
“Once you get to that point, you’re going to see prices jump.” – said Chapman.
“We are sounding the alarm about the record low level of reserves,” said Director General of the American Petroleum Institute, Mike Somers. Fox Businessa program the administration is known to keep a close eye on. “We have to solve this problem in the Strait of Hormuz.”
The warnings are not limited to US oil companies. Frederic Lasser, head of analytics at commodities trading giant Gunvor Group, said in late April that if the Hormuz shutdown were to drag on for another month, oil markets would effectively run out of supplies and reach a “backfill.” Fortune.
Helima Croft, head of global commodity strategy at RBC Capital Markets, separately described desiccated storage tanks as an “iceberg under water” during a Council on Foreign Relations event.
What does the average price of gas in the country show now
The national average price for a gallon of regular gasoline was $4.26 on Wednesday, up $1.28 from pre-war levels, according to AAA data cited by E&E News. That’s down from levels close to $4.50 reached a few weeks earlier, a decline the administration attributed to market optimism over possible talks to reopen the strait.
UBS has forecast Brent prices will be in near triple digits by the end of 2026, and Citi has warned that Brent could hit $150 a barrel if flows from Hormuz remain disrupted until June, a threshold the calendar is now approaching.
The inventory management warning is actually the mechanism behind these bank forecasts: the price has not yet fully reflected the supply shortage because the inventory has been absorbing it, and that absorption capacity is now running out.
What is excluded from public warnings:
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Stockpile concerns vary across fuels and regions. Some of the private conversations with administration officials focused specifically on the West Coast jet fuel shortage, a regional and product-specific squeeze that is not reflected in national gasoline figures, according to E&E News.
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Total U.S. commercial crude and SPR inventories fell by about 90 million barrels from a recent peak, including a 16 million barrel decline in one week, according to analysis by Saxo Bank, which cited Energy News Beat.
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The warning comes in the middle of a midterm election cycle that has seen Democrats ahead of voter intentions by nearly seven points, meaning gas prices are becoming a political variable in addition to an economic one. The Daily Beast reported.
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GasBuddy is predicting the most expensive summer at the pumps in years, forecasting $4.48 around Memorial Day and $4.80 on average this summer if the Strait closure continues, according to Checking the price of gas.
Why the summer auto season raises oil prices
The reason this dispute matters beyond Washington politics is timing. The peak summer motoring season is the period when demand for gasoline is highest, and it occurs at the same time. Executives say stocks are at the lowest point of the conflict.
If Brent reaches the $150 to $160 range described by Chapman, the gap between current pump prices and what the supply math implies will soon close.
The disagreement between the industry and the White House isn’t really about whether prices can go up. It’s about how much warning the public should be given before they do this.
Executives say the safest message right now is to prepare Americans for higher prices. The administration’s position is that it risks becoming a self-fulfilling prophecy.
White House Press Secretary Taylor Rogers added a specific prediction in the same statement cited Everyday beastsaying that gas prices will “fall to multi-year lows” once the conflict reaches a successful conclusion. Whatever framing turns out to be accurate will likely become clear in the mid-to-late June period that both sides are now watching.
Related: Exxon CEO delivers candid message on oil prices and economy
This story was originally published Street On June 14, 2026, where he first appeared in the Hospitality separation. Add TheStreet as Preferred source by clicking here.