Global energy markets are increasingly bracing for the possibility of a major supply crisis as tensions surrounding the Strait of Hormuz continue to threaten one of the world’s most critical oil transit routes. Analysts warn that if shipping disruptions persist into June, the world could face a genuine “scramble for crude” as governments, refiners, and corporations rush to secure dwindling supplies.
According to energy research firm HFI Research, markets may be underestimating the severity of supply risks emerging in the Middle East. In analysis published on Substack and cited by Business Insider, the firm warned that if disruptions in the Strait of Hormuz continue into early June, global oil markets could face panic buying and severe supply pressures.
If the Strait of Hormuz remains closed through the summer, oil markets will likely descend into “real panic,” the research firm noted.
Strait of Hormuz remains central concern
The Strait of Hormuz handles roughly one-fifth of global seaborne oil trade, making it one of the world’s most critical shipping and industrial chokepoints. Any prolonged disruption would have immediate consequences for energy flows to Asia, Europe, and global industrial supply chains.
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HFI Research warned that many Wall Street institutions still appear overly optimistic, assuming Middle Eastern oil exports will normalize relatively quickly. However, the firm argued that supply conditions could deteriorate much faster than markets expect.
The group previously estimated that the U.S. could exhaust much of its excess petroleum inventory within roughly eight weeks if current conditions persist. Data from the U.S. Energy Information Administration showed that combined U.S. crude oil and petroleum product inventories had declined sharply since early April, reinforcing concerns about tightening global supply conditions.
Oil prices remain high
Though oil prices briefly retreated on May 20, markets remain highly sensitive to geopolitical developments. According to Reuters, Brent crude fell more than 2 percent to roughly $108.70 per barrel, while West Texas Intermediate (WTI) crude declined to around $102.08. Even after the pullback, both benchmarks have remained above $100 for weeks, hovering near multi-year highs.
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Part of the temporary easing in oil prices came after U.S. President Donald Trump suggested the conflict involving Iran could “end very quickly,” while Vice President J.D. Vance said negotiations with Tehran had shown signs of progress. However, Trump also reiterated that the U.S. still reserved the option of additional military strikes against Iran, underscoring the continued uncertainty facing energy markets.
Several major financial institutions have warned that traders may still be underpricing the risk of a prolonged supply disruption. Analysts at Citigroup forecast that Brent crude could rise to $120 per barrel in the near term. Meanwhile, energy consultancy Wood Mackenzie warned that oil prices could approach $200 per barrel if the Strait of Hormuz remains severely disrupted through the end of the year.
Energy brokerage PVM also cautioned that global crude inventories are approaching dangerous levels even as some market participants remain “surprisingly calm.”
Strategic reserves feeling the pressure
To offset tightening supply conditions, the U.S. and several allied countries have increasingly relied on commercial inventories and strategic petroleum reserves. However, shipping data suggests the broader energy supply chain remains under significant strain.
Reuters reported that only three supertankers carrying approximately 6 million barrels of Middle Eastern crude passed through the Strait of Hormuz on Wednesday en route to Asia. Before the latest regional conflict escalated, roughly 130 vessels per day typically transited the waterway.
Meanwhile, the United Kingdom has reportedly eased certain sanctions restrictions to permit imports of diesel and jet fuel refined in third countries using Russian crude oil, a move intended to reduce pressure on European energy markets. Additional concerns emerged after Saudi production and export figures reportedly fell to historic lows in March, intensifying fears of tightening global supply.
Analysts say global markets have so far avoided a more severe energy shock largely because the United States and its allies continue releasing emergency reserves. But they warn that once those buffers begin to diminish, any prolonged instability in the Middle East could trigger a far more dramatic spike in prices and broader economic disruption.
