Citi predicts that a disruption in the Strait of Hormuz could push oil prices up to $130 per barrel

According to Citigroup, if navigation through the Strait of Hormuz is blocked for a month, oil prices could rise to $110 per barrel, and global crude and refined product inventories may lose an estimated 1.3 billion barrels. Even if a ceasefire extension agreement is signed this week, with maritime transit and production gradually resuming in May, inventories could still decrease by about 900 million barrels, including 500 million barrels already lost and an expected 400 million barrels lost due to production delays and conflict-related damage. If the disruption extends to two months, losses could reach 1.7 billion barrels, pushing oil prices to $130 per barrel. Citigroup forecasts that even if the conflict ends this week, inventories by the end of June will still fall to their lowest level in eight years, and it may take more than two years to rebuild them, even if the market returns to a daily oversupply of 1 million barrels.