A potential agreement between the United States and Iran cannot arrive soon enough for oil markets, now close to a risky turning point three months after the start of recent hostilities. Spot prices for crude have risen sharply to around $100 a barrel following Iran’s decision to close the Strait of Hormuz in response to actions by the US and Israel. Although prices remain below past peaks and appear stable on the surface, underlying pressures are building toward what analysts describe as a sudden disruption. Several measures have so far eased supply concerns, such as large releases from strategic reserves, alternative pipeline routes for Gulf output, and reduced Chinese imports that may indicate stock drawdowns. However, the International Energy Agency reported last week that global inventories are falling at an unprecedented pace, with some forecasts warning of critically low levels by late June if current trends continue. Such shortages could trigger sharp price increases and force major cuts in consumption, leading to wider economic harm. Analysts at Capital Economics and JP Morgan have highlighted the risk of OECD stocks reaching stress points soon, shifting markets from controlled to involuntary demand reductions. The United States has been partly shielded as a net crude exporter, yet households have still faced higher fuel costs estimated at $300 per home since the conflict began. Broader effects are now spreading to liquefied natural gas, fertilizers, shipping, and industrial supplies, according to the Institute of International Finance. Even if the strait reopens, experts expect only partial recovery, with energy systems remaining tighter and more vulnerable than before.
