Commodities firm joins chorus of oil executives warning of crude price spike

(Originally published June 5 in “What in the World“) Commodities trader Trafigura is echoing oil industry warnings that crude prices are likely to spike still higher.

Trafigura made its prediction while reporting that it doubled net profits in the six months ended March 31. Its chief economist said energy markets were at an inflection point, with the world having largely depleted fuel inventories in response to the closure of the Strait of Hormuz. Oil’s price increases since the war began don’t yet reflect the severity of the coming shortage of crude, he said.

Oil executives have been making the same warning to Trump, saying oil prices are likely to spike dramatically in the next few weeks as reserves run dry. “You’re hitting tank bottom,” one industry executive told Politico.

But the war shows no signs of stopping. Iran has demanded as a prerequisite to peace talks that Israel stop bombing Hezbollah in southern Lebanon, but Hezbollah just rejected the latest ceasefire Trump pushed Israel this week to sign with Lebanon—a deal that was for some reason negotiated without Hezbollah’s involvement. That deal was contingent on Hezbollah not attacking Israel, so Israel said Hezbollah’s rejection of the deal meant its attacks would continue.