Crude oil short positions have tripled in two months, as traders bet the Strait of Hormuz crisis is nearing an end.

According to exchange data through June 2, portfolio managers have been steadily increasing their crude oil short positions since early April. Data compiled by energy analyst John Kemp shows that Brent crude short positions grew by approximately threefold between late March and early June. Markets widely believe that a ceasefire agreement and diplomatic negotiations will ultimately restore normal navigation through the Strait of Hormuz, thereby normalizing global crude oil supply. However, this optimistic financial-market expectation stands in stark contrast to rapidly tightening supply-demand fundamentals in the physical crude market. Data from the International Energy Agency (IEA) indicates that around 13 million barrels per day (bpd) of global crude supply has been disrupted due to the ongoing obstruction of the Strait of Hormuz. Between March and April alone, global crude inventories declined by roughly 250 million barrels—equivalent to a buffer of about four million bpd for over two months. As inventories continue to fall, a critical question emerges: if the supply disruption lasts longer than anticipated, how much longer can the current inventory buffer sustain the market? The inventory buffer is vanishing rapidly. In contrast to the futures market’s optimism, the physical market is sending entirely different signals. Global crude inventories are declining continuously. Inventories at Cushing, Oklahoma—the delivery hub for WTI crude—have approached their minimum operational level. Meanwhile, floating storage and onshore commercial inventories are also shrinking steadily. In past years, inventories served as a market buffer during supply shocks, helping to dampen price volatility. But with continuous drawdowns, this buffering capacity is weakening. Chevron CEO Mike Wirth previously warned that the market’s “cushion and shock absorbers” are being progressively depleted, and the market’s ability to absorb supply deficits has clearly weakened compared with the crisis’s early stages. In other words, the reason crude prices have not surged more sharply thus far is largely attributable to inventory releases. Once inventories decline to critical levels, supply-demand imbalances will be reflected far more directly—and immediately—in prices.

Global crude oil inventories are hitting bottom! Three major energy giants warn: the market has yet to feel the true impact.

The global crude oil supply buffer is depleting rapidly. With the Strait of Hormuz remaining blockaded, international oil majors have issued stern warnings: commercial inventories, strategic reserves, and crude held aboard tankers are all being drawn down at an accelerating pace—and the market has not yet felt the full brunt of this energy crisis. ExxonMobil, Chevron, and ConocoPhillips all stated this week that each additional day the Strait of Hormuz remains closed results in greater consumption of global reserve resources. Chevron CFO Eimear Bonner explicitly told Bloomberg Television on Friday: “Cushion space is nearly gone,” and warned that “if you look at the unprecedented impact of this supply disruption on global oil and gas supply, the market is far from feeling its full effect.” For U.S. consumers, the crisis is already manifesting as an average gasoline price increase of about $1.40 per gallon. Yet as reserves accelerate toward depletion, analysts fear broader price pressures are building—and inflationary ripple effects may soon propagate further downstream. Reserves running low: Three oil majors sound the alarm simultaneously The supply disruption triggered by the Strait of Hormuz blockade has forced global markets to draw simultaneously on three categories of reserve resources—commercial inventories, national strategic petroleum reserves, and floating storage previously held aboard tankers. ExxonMobil, Chevron, and ConocoPhillips delivered remarkably consistent messages this week, all highlighting the rapid depletion of these three buffering resources. Bonner’s wording was especially direct: the existing cushion is “extremely limited.” This implies that should the Strait remain blocked, global markets will face genuine supply shortages—not merely temporary gaps filled by reserve draws. The crisis’s impact has already spread from Southeast Asia to Europe, with energy costs rising significantly across multiple regions.

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