Oil’s safety net is disappearing. Brent crude broke above $85 a barrel Wednesday, and West Texas Intermediate (WTI) cleared $80.

Both benchmarks have risen for three straight days as US and Iranian forces trade strikes near the Strait of Hormuz. Traders say the bigger risk isn’t the daily move, but how much reserve capacity remains to absorb the next shock.

The Reserve Cushion Is Almost Gone

June Goh, a senior oil market analyst at Sparta Commodities, tracks that cushion closely. She told Al Jazeera the reserve buffer that absorbed months of supply shocks is nearly empty.

Washington has drawn down the Strategic Petroleum Reserve (SPR) throughout the conflict. It tapped the reserve each time fighting flared to soften the blow. Goh warns a sharp price jump could follow if Washington and Tehran keep escalating instead of easing tensions.

That warning follows an earlier G7 discussion, where governments weighed releasing up to 400 million barrels during a previous spike. It also echoes a recent alert from an ExxonMobil executive, who warned weeks ago that global inventories were tightening fast.

Trump Ties Strikes to a Blockade Reversal

President Donald Trump has raised the stakes further. He told Fox News that strikes will intensify next week. The targets, he said, are Iranian power plants and bridges, unless Tehran returns to the table.

Iran has not ruled out charging its own tolls on Hormuz shipping in response. Trump, meanwhile, reversed course on a separate plan. He dropped a proposed 20% fee on cargo moving through the strait. Gulf states will offer trade and investment deals instead, he said.

The US reimposed its naval blockade on Iranian ports the same day. That built on Trump’s earlier push to assert control over the waterway.

Shipping traffic has already responded. MarineTraffic recorded 57 transits through Hormuz from Friday through Sunday, a drop of more than 50% from the previous week. Before the war began in February, the strait handled roughly 130 transits a day.

Wall Street Is Pricing In $100 Oil

Bart Melek, global head of commodity strategy at TD Securities, thinks the rally could run further.

“I suspect that a move to $100 is quite possible, should it become apparent that physical shortage risks are real and increasingly likely.”

The US Department of Energy disputes the shortage narrative. It said Monday that 8.5 million barrels crossed the strait the day before with military assistance. That pace, it said, matches typical flows.

Higher crude could complicate the inflation outlook too. Analysts had expected the June CPI report to show cooling prices as fuel costs retreated. Whether that trend survives now depends on Trump’s next move, and on whether Tehran decides to return to the table.

Source: BeInCrypto