When oil prices could get even worse

• And buffers against economically devastating shortages in major importing countries are also at risk.

The latest: President Trump said Thursday that a deal with Iran is imminent, but the outlook changed so many times in the course of one day that it could easily change again.

• The oil markets seem to think it might happen, though, as oil is trading around its lowest levels in three months.
• The global benchmark Brent crude was trading at $87.94 Friday morning.

Threat level: At some point, stockpiles will fall too low to keep easing the market, and other measures won't be able to offset the loss of barrels flowing through the strait.

• That point could be coming soon. A recent note from investment firm Macquarie estimates that if the strait is still closed on Labor Day, Brent crude prices could be $130-$150.
• "If the war continues into 2027, prices of ~$200 may be needed to balance supply and demand," it projects.
• Oil and gas executives told the Washington Post that some inventories could be depleted within weeks.

How it works: Storage can't go to zero. Sludgy oil at tank bottoms is not usable, pipelines need certain amounts to maintain function, and refineries need minimum stocks.

State of play: U.S. stockpiles, both private and the Strategic Petroleum Reserve, are dwindling fast. They're falling in a number of other nations, too.

• "The world has been relying on inventories to kind of manage the supply disruption, but ... that can't last forever," Aaron Brady, a top analyst with the research and consulting firm S&P Global Energy, said in an interview.

What they're saying: "If the strait is not reopened in, call it the next month or so, those inventories are going to get, we think, towards those minimum operating levels in the U.S., perhaps other places as well," Brady said.

• "When that happens, you don't have that supply buffer, and that's a recipe for upward pressure on oil prices, including gasoline prices," he said.
• Veteran analyst Daniel Pickering of the investment firm Pickering Energy Partners, in the firm's latest video explainer, said U.S. storage could start to scrape operational minimums "toward the end" of summer.

The big picture: Before the war, global oil inventories were rising as production grew faster than demand.

• It's one of the biggest reasons that while oil prices have soared, they have stopped well short of dire predictions of $150 per barrel or even much higher.
• Other buffers include China's import decline, Saudi Arabia and some other producers moving more through pipelines, some tankers getting through, and governments' use of strategic reserves.

Zoom in: U.S. commercial crude storage levels fell by over 7 million barrels to 426.5 million the week ending June 5, per federal data.

• These commercial supplies are draining fast even as the Trump administration has provided the market with oil from the Strategic Petroleum Reserve.

The intrigue: One reason for the U.S. inventory decline is rising U.S. oil exports.

• They're going into a global market that needs barrels to help offset the Strait of Hormuz bottleneck.
• But Trump administration officials have said they're not considering restrictions on U.S. shipments abroad.

Reality check: The global oil system has proven surprisingly flexible in the face of an unprecedented disruption, so it's hard for experts to know what's next with any precision.

The bottom line: S&P Global Energy points out that inventories in the critical Midwest and Gulf Coast refining markets are currently at 351 million barrels.

• A "danger zone" starts when they get down to around 325 million, the firm estimates.
• "As inventories drop below this threshold, the market becomes increasingly vulnerable to logistical bottlenecks and price spikes," the firm said in a note Thursday.

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