The oil market is just four weeks away from a 'tipping point' that could drive prices significantly higher, analysts have warned. Donald Trump has told oil executives that the blockade of the Strait of Hormuz could 'continue for months', raising fears that global stockpiles could dip below critical levels.
Frederic Lasserre, head of research at Gunvor, one of the world's largest oil traders, told the Financial Times: 'We do not have months. It goes beyond gasoline at the pumps to industry shutting down and you enter recession. The tipping point is clearly June. This is the point at which something has to give.'
Amrita Sen, founder of Energy Aspects consultancy, warned that if the conflict continues to the end of June, all stocks would be exhausted. 'Essentially you can pick a number when it comes to the oil price. We will just not have any buffers,' she said. The price of a barrel of oil hit $126 this week, but could rise to $150–$200 if the conflict persists.
The warnings come as Israeli airstrikes on southern Lebanon continue despite a ceasefire with Hezbollah. Officials reported at least seven people killed yesterday. Israel's military issued new evacuation warnings for nine southern villages, and said it carried out about 50 airstrikes in the past 24 hours targeting Hezbollah infrastructure.
Hezbollah claimed it attacked Israeli troops with a drone inside a house in the coastal village of Bayed. Over recent weeks, the Israeli army has been levelling neighbourhoods near the border, destroying buildings it says were used as outposts by the Iran-backed group. A video released by the military showed soldiers walking through the destruction of a football stadium in Bint Jbeil, which the army said was booby-trapped.
Lebanon and Israel have held their first direct talks in more than three decades, but remain formally in a state of war since 1948. A 10-day ceasefire declared in Washington went into effect on April 17 and was later extended by three weeks, but hostilities have continued.
