Oil markets are showing a fragile calm, but analysts warn that Europe could confront physical shortages by month’s end as global stockpiles dwindle. Executives from major commodity firms note that the current low‑inventory environment has not yet pushed prices to reflect the looming crunch.

Jeff Currie, co‑chairman at Abaxx Commodity Exchange, cautioned that the first signs of a European supply squeeze could appear “any day now.” He explained that once inventories hit critical lows, prices would respond in a non‑linear fashion, with buyers willing to pay a premium for the remaining barrels.

The International Energy Agency has highlighted the rapid drawdown in reserves, while market analysts from Societe Generale describe the current situation as a “veneer of stability” masking an underlying stress. The Strait of Hormuz, which supplies roughly one‑fifth of world oil, remains constrained following the February U.S.–Iran confrontation. Even a swift reopening would delay the return of several million barrels per day for at least three months, further tightening the market.

With U.S. Memorial Day and UK spring bank holidays approaching, demand for diesel, gasoline and oil is set to rise sharply, exacerbating the inventory squeeze. Should the Strait stay closed into late summer, analysts project that oil prices could surge toward $150 a barrel and remain elevated throughout the year.

“The system is highly sensitive to any shift in reopening timing,” said a Societe Generale analyst. “Even a small delay can push normalization out to September and extend stress through 2027.”

Brent crude and U.S. West Texas Intermediate prices have risen in tandem with stalled negotiations between Washington and Tehran, underscoring the market’s vulnerability to geopolitical developments.