The International Energy Agency (IEA) warns that the conflict in Iran could shift fuel supply issues to Europe. Executive Director Birol indicated crude oil prices may hit $90 by the end of June, already up 15% from pre-conflict levels.
Traders are currently skeptical that disruptions will lead to a significant drawdown of US crude oil reserves, which are projected to remain above 325 million barrels by May 1. The market shows little trading activity for crude oil prices by June 30, but the IEA's projections of European fuel shortages signal a real risk of price escalation.
Any production cuts by OPEC+ could further drive prices toward the $90 mark. The thin market for strategic petroleum reserves means large orders could significantly impact prices. Traders appear to be waiting for concrete signals, such as confirmed production cuts or further geopolitical escalation, before committing capital.
Key indicators to watch include OPEC+ announcements on production adjustments and any further disruptions in the Strait of Hormuz, which will be critical in determining if crude prices reach the $90 threshold.