President Trump will make his deals or not, and we have to let it all unfold. I trust President Trump to do what he has to do. He will make a move sooner, rather than later. However, I don’t see Iran making a deal. Does anyone really think he will get a deal? Iranian rulers believe in the ideology of the 12th Imam with cult-like fervor.
The 42nd Bernstein Strategic Decisions Conference this past week was a combination of good news and doom and gloom.
The conference concluded that, despite oil price shocks, fundamentals remain solid, with steady employment and consumer strength. Bank of America predicted strong U.S. GDP growth of 2.2%, supported by robust consumer spending (gas, travel, dining) and low unemployment.
Zero Hedge highlighted the more alarming news from oil barons, bankers, and world leaders about low oil supplies and the crisis this might soon create. They were not optimistic, especially Exxon. But this isn’t what will definitely happen, but it could.
Chevron
Chevron CEO Mike Wirth warned that oil prices are likely to rise over the next two months, as already-near-record-low crude inventories continue to decline due to the war in Iran.
“The buffers and the shock absorbers are being steadily drawn down, and the ability for the market to absorb this imbalance is drastically diminished today versus where we started,” he said at a Bernstein conference on Thursday.
Wirth’s Bernstein remarks underscore a growing consensus among energy leaders that the oil market is approaching a point where small supply disruptions could trigger sharp price increases and that the current low-inventory environment leaves little room for error.
“Over the next few weeks, we’re likely to see those pressures flow through more directly to physical prices, and there’s more upwards pressure that I would expect as we get into June and certainly into July.”
Wirth’s comments follow a 10% fall in oil prices over the past week.
Exxon
At the same Bernstein conference, Exxon SVP Neil Chapman made some horrifying remarks, as Zero Hedge characterized it. Chapman explained that the prices are deceiving because of the artificial mitigations. This sets up a shocking situation as the supplies are depleted because they can’t get through the Strait.
Mispriced Oil Trap
- The prices haven’t gone through the roof due to reserves and hopeful comments about a deal with Iran.
- A massive 11 to 12 million barrels of oil per day have been removed from the 100 to 104 million-barrel global market. Yet crude has traded relatively cheaply and quietly between $90 and $110 for the last six weeks.
- Temporary mitigations have created the illusion that everything is under control.
The Coming Meltdown
- Saudi Arabia maxed out its East-West pipeline at 5 million barrels a day.
- Sanctioned oil from Iran, Venezuela, and Russia has entered the market to fill the gap.
- Commercial inventories and strategic petroleum reserves have been drawn down to critical levels. “We’re approaching unheard of inventory levels,” Neil Chapman stated bluntly.
- Once those all-time low inventory levels are reached, there is only one way for prices to go. Exxon’s models show prices going to $150 or even $160. “Once you get to that really low inventory level, up to $150 or $160, the models would tell you that.”
This price signal is expected in just 2 to 3 weeks, according to Exxon’s global trading insights.
At those levels, demand will eventually be destroyed as oil becomes unaffordable. The spike will be sharp, painful, and unavoidable in the near term. Exxon’s five-year-old trading organization in Houston, London, and Singapore sees this with unmatched precision.
The current oil price is a dangerous mispricing built on borrowed time and drained inventories.
Neil Chapman, SVP of Exxon this morning at the Sanford Bernstein Strategic Decisions Conference perhaps going a little off corporate script: pic.twitter.com/4FXMkT4Rb8
— Eric Nuttall (@ericnuttall) May 28, 2026
The fuse is allegedly lit—and the explosion is coming fast. The repricing will be violent, driven mostly by need. The oil companies will also gouge us.
The World Bank/IMF/IEA
They are all warning of an incoming energy crisis that could become “the biggest shock ever to the global energy market.”
The Federal Reserve
The Fed’s “Financial (IN)Stability Report flagged geopolitical risk and oil shock as MAJOR concerns, warning of inflation and growth risks due to energy shock.
JPMorgan/Jamie Dimon
He warned that the Iran war could drive inflation and interest rates higher, with oil shocks and sticky inflation as major risks.
Goldman Sachs
Goldman warned that global oil stocks are approaching an eight-year low and that the speed of depletion is a concern. President John Waldron also said, “We’re in a world of very strong nominal growth. The consumer is extraordinarily resilient, and the labor market is quite resilient. Inflation is probably the single biggest risk element.
EIA/US inventory data
Crude, gasoline, distillates, and SPR levels are “under pressure.” With commercial crude down, gasoline down for the 15th straight week, distillates/diesel dropping, and the SPR falling again.
Scott Bessent is optimistic.
The economic outlook is great, but oil is a big problem. Scott Bessent warns that we must become less reliant on the world, but he is generally optimistic.
US Treasury Secretary Scott Bessent said on Thursday that Oman’s ambassador assured him there are no plans to impose tolls on the Strait of Hormuz, adding that free navigation through the waterway must be maintained. Bessent also said oil prices were down about 10% in May and… pic.twitter.com/rycfPjPym8
— Iran International English (@IranIntl_En) May 28, 2026