Oil market could enter a real panic as early as the beginning of June if the Strait of Hormuz remains closed and stocks reach their limit, warns research company.

With the Strait of Hormuz still closed, HFI Research warns that the oil market may face real panic at the beginning of June, as stocks fall, prices remain above $100, and the risk of mass buying increases

The oil market faces a turning point in the first week of June if the Strait of Hormuz remains closed, warns HFI Research. The company states that, in this scenario, oil markets could enter “real panic.”

The assessment contrasts with optimistic forecasts about crude oil normalization. For HFI, these projections may be linked to “psychological biases,” while stock mathematics indicates pressure.

Oil market in a critical phase

HFI Research, focused on energy markets, stated on Substack that the first week of June could mark a major turning point. The scenario, however, is not its base case.

The company wrote that if Hormuz is closed, panic could occur in the oil market. The reaction would include panic buying of oil and stockpiling by nations in the face of falling stocks.

Stocks sustained resilience

Oil prices reached the highest level in the last three years, as markets assess supply disruptions in the Middle East. Brent remained above $100 for most of the past month.

The recent resilience was attributed to the use of surplus stocks by the US and other nations. At the end of April, HFI estimated that the United States would deplete these stocks in eight weeks.

In the week ending May 8, the US had 1.6 billion barrels of oil and derivatives in stock, a drop of 67 million compared to the beginning of April, according to the Energy Information Administration.

Risk of panic buying

HFI states that the oil market has reached a “breaking point.” The company sees the risk of a vicious cycle, with extreme scarcity causing buying and stockpiling.

There was no concrete forecast. Previously, HFI speculated that crude oil could exceed $150 per barrel, stating that lost barrels ensure higher prices.

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