HFI Research warns the oil market will hit a critical turning point in early June if the Strait of Hormuz stays closed. The firm predicts real panic will grip crude markets as oil inventories run out, setting off waves of panic-buying and hoarding that could send prices past $150 a barrel.
The US is drawing down its strategic reserves to shield markets from immediate pain. The US had 1.6 billion barrels in stock the week of May 8, down 67 million from early April. HFI predicted in late April that US excess supply would exhaust by the end of June.
The math is inescapable. Most forecasters expect markets to stabilize by June, but HFI called those predictions driven by "psychological biases." The firm said the math shows inventories cannot hold if the Strait remains blocked. Brent crude has stayed above $100 for most of the past month, reflecting the magnitude of the supply loss from the Middle East disruption.
HFI's scenario is not its base case, but the firm said the downside risk is real. If inventories hit bottom while the Strait stays closed, buyers will have no choice but to compete aggressively for remaining barrels. That dynamic would break the current price equilibrium and create self-reinforcing demand.
The Strait of Hormuz remaining closed through the first week of June is the hinge. If the passage stays blocked, oil markets move from shortage management into scarcity.
