IEA data shows onshore inventories fell sharply while more crude is stuck at sea, making supplies harder to access quickly; if the trend continues, analysts warn oil could climb from about $109 to at least $140 a barrelDoron Paskin, Calcalist|The global oil market has entered a more dangerous phase of the Hormuz crisis. In the first weeks, attention focused on barrel prices and attacks on tankers and facilities near the strait. In recent weeks, the focus shifted to whether the United States and Iran were moving toward an agreement. Now, a deeper problem is emerging: a rapid erosion of oil inventories available for consumption and refining, and a widening gap between the amount of oil that exists “on paper” and the amount that is actually in the right place for immediate use.To understand the risk, it is important to distinguish between total oil inventories and stocks that can be used quickly. “Observed global oil inventories” is a broad term that includes onshore stocks — oil held in tanks, storage terminals, pipelines and refineries — as well as oil “on the water,” meaning crude carried by tankers on their way to a destination, waiting to unload or taking longer-than-usual routes.3 View gallery (Photo: Eran Granot)Statistically, both types of barrels count as inventory. Operationally, they are not equal. A barrel stored near a refinery can be used quickly. A barrel sitting on a tanker delayed by insurance problems, security risks or a route change does not offer the market the same level of security.According to the latest report by the International Energy Agency, observed global inventories fell by 129 million barrels in March and by another 117 million barrels in April. Onshore stocks dropped by 170 million barrels in April, while the amount of oil on the water rose by 53 million barrels.That figure is significant. It shows that some of the oil has not disappeared, but has shifted from more accessible onshore storage into a shipping, waiting and transport system that has become slower, more expensive and less predictable.This complex situation has turned June into a test month for the market — not because the world is about to run out of oil, but because commercial inventories cannot fall to zero. Refineries, ports, pipelines and distribution systems all require a minimum level of operational stock. When inventories approach that lower threshold, the market becomes far more sensitive to any additional disruption.Tankers unable to use the strait, insurance difficulties, a refinery malfunction or another attack could trigger a sharp price reaction. That is why experts estimate that if Hormuz remains closed and OECD inventories continue to fall at the pace recorded in April, they could reach critically low levels by the end of June. In that scenario, the price of oil could jump to at least $140 a barrel, compared with about $109 today.The Iraqi example shows why the strait does not need to be hermetically sealed to cause severe damage. Iraq’s incoming oil minister, Bassem Mohammed, said over the weekend that in April the country exported only 10 million barrels through Hormuz, compared with about 93 million barrels in the month before the war.According to him, exports through the strait depend on the arrival of tankers, which are not entering because of insurance problems — even though Iraq is considered one of the countries in the region most friendly to Iran. The implication is that the United States can speak of an operation to extract stranded tankers, but commercially, without an agreement, the strait will be treated by the industry as blocked because most shipowners and insurers will not be willing to take the risk.The problem is not limited to crude oil. According to IEA estimates, refinery output will fall by 4.5 million barrels per day in the second quarter, partly because of infrastructure damage, export restrictions and reduced availability of feedstock.This is a crucial point because the economy does not consume a barrel of Brent crude. It consumes diesel, jet fuel, gasoline, fuel oil and other refined products. If crude does not reach refineries on time, the shortage could appear first in transportation, aviation, agriculture, maritime shipping and food prices.The timing is especially problematic because the crisis is entering the summer months in the Northern Hemisphere, when fuel demand tends to rise.At the same time, the diplomatic dimension of the crisis is becoming clearer. After the suspension of the U.S. operation to escort vessels through Hormuz, Iran announced that it would ensure safe passage “in accordance with new procedures,” but did not specify what those procedures would be.3 View gallery (Photo: Frederic J. BROWN / AFP)The use of the term “procedures” appears to have drawn interest among Gulf states, which are not necessarily enthusiastic about opening a sea route by force. Instead, they want a framework that will convince the market that passage through the strait can once again be insured, priced and planned. This also explains reports that Gulf states are exploring new understandings with Iran, despite hostility that has deepened in recent months.For Riyadh, Abu Dhabi, Doha and Kuwait, the issue is not only security-related. It concerns export revenues, reliability with Asian customers, insurance costs, the image of stable suppliers and the ability to keep functioning inside an already strained global energy market. For Qatar and Kuwait, which have no significant bypass route to the open sea, the need is critical.Ultimately, Iran has achieved its goal. It did not need to seal Hormuz completely to disrupt the energy market. It was enough for the strait to stop being a route that the market is willing to insure, price and plan around.That is why the coming month is so important. As onshore inventories erode, the market’s ability to absorb another delay, another insurance exclusion or another strike on infrastructure declines. If minimal certainty is not restored around passage through the strait, the crisis could move from oil price volatility to pressure on refined fuel supplies, shipping, aviation and food supply chains.In that sense, Hormuz is no longer just a military flashpoint between Washington and Tehran. It is becoming a test of the operational trust on which the global energy economy depends.