The agreement between the U.S. and Iran paves the way for the reopening of the Strait of Hormuz, but whether this can timely halt the accelerating depletion of global oil stockpiles will determine the direction of energy prices in the coming weeks.

Both nations have simultaneously announced the achievement of a ceasefire memorandum of understanding, with authorization granted for the "free opening" of the Strait of Hormuz and the lifting of the naval blockade. A formal signing ceremony is scheduled for June 19 in Switzerland.

However, according to recent reports, energy industry executives are sounding the alarm: over the past more than 15 weeks of blockade, the world has cumulatively consumed hundreds of millions of barrels from strategic and commercial reserves, bringing inventories perilously close to historically low levels. Even if the Strait were to reopen immediately, it would take months for the market to normalize.

Several industry leaders have been forthright about the severity of the situation. Neil Chapman, Senior Vice President at Exxon Mobil Corp., stated that the U.S. is approaching "unprecedented inventory levels." Chevron Corporation CEO Mike Wirth has repeatedly warned publicly that supply tightness will soon become evident globally.

Strategic and Commercial Inventories Under Severe Strain

Since late March, the United States has drawn down approximately 66 million barrels of crude oil from the Strategic Petroleum Reserve (SPR). The SPR is a salt cavern storage system along the Gulf Coast, established after the 1975 Arab oil embargo, with peak holdings exceeding 700 million barrels in 2009.

The administration has authorized the release of 172 million barrels. Reports indicate that if the current drawdown rate continues, this quota could be exhausted as early as the beginning of September. At that point, SPR inventories would fall to around 243 million barrels, an extremely low historical level.

The significance of this figure extends beyond the quantity itself. The core function of the SPR is to provide the U.S. with a buffer against sudden supply disruptions or natural disasters like hurricanes. Once the reserve is significantly depleted, America's maneuvering room in future energy crises will be substantially narrowed.

The commercial storage sector is also under pressure. Inventories at Cushing, Oklahoma, the key U.S. crude pricing hub, have fallen to 21 million barrels, with a further reduction of about 1 million barrels in the most recent week.

John Auers, Executive Vice President of Refined Fuels Analytics at RBN Energy (part of analysis firm Novi Labs), points out that storage tanks typically need to maintain 10% to 15% capacity to operate normally—due to physical constraints like outlet placement and tank bottom sediments. When Cushing inventories drop to around 20 million barrels, operators will begin to encounter a series of operational challenges.

"Once you hit tank bottoms, the whole operation grinds to a halt," Auers stated. He also noted that 20 million barrels is not an absolute hard line; operators might still attempt to continue drawing oil, but the rate will slow significantly.

Pessimistic Outlook from U.S. Energy Executives

Facing this situation, statements from several energy executives are reportedly far more pessimistic than those from government officials.

Neil Chapman, speaking at an industry conference in New York, said: "You can debate whether that tipping point is two weeks away or three weeks away, but once you get to that point, prices are going to go up sharply."

Wil VanLoh of Quantum Capital Group was more blunt: "It's going to get ugly." He added, "The world has never had a precedent of eliminating 10 million barrels per day of oil demand in a single day"—referring to the crude production unable to reach the global market due to the Strait blockade.

Chevron Corporation CEO Mike Wirth expressed skepticism about Energy Secretary Chris Wright's statement that "7 million barrels per day of petroleum products are still moving through the Strait with U.S. military assistance." "Our assessment is that the actual volume may not be that high," he said.

Separately, it was reported that U.S. Energy Secretary Chris Wright stated last week that the situation has been briefed, and the administration does not anticipate a significant surge in energy prices. "I don't think so... We have challenges, but I think we are working through them," he said.

A spokesperson stated: "When the President drives this conflict to a successful conclusion, oil prices will retreat to multi-year lows, and the global energy market will be more stable in the long term."

However, reports also note that the agreement itself still contains many variables. It has been indicated that confirmation of mine clearance is still required before the Strait can reopen. Tanker operators and their insurers are expected to remain cautious about resuming transit.

More importantly, this agreement merely establishes a framework for subsequent difficult nuclear negotiations. The core disagreement—the U.S. demand for Iran to surrender or dilute its highly enriched uranium—remains unresolved. If substantive progress is not made in nuclear talks, long-term security assurances for the Strait will remain in doubt, and oil market uncertainty will persist accordingly.