Oil industry warns Trump administration of price spikes within weeks

Oil industry warns Trump administration of price spikes within weeks

Industry executives said the loss of oil through the Strait of Hormuz is draining petroleum inventories to dangerously low levels.

A bulk cargo ship sits at anchor in the Strait of Hormuz off Bandar Abbas, Iran, on May 2. | Amirhosein Khorgooi/ISNA via AP

The oil industry is warning the Trump administration that a Hormuz-sized hole in the world’s petroleum market is steadily draining inventories to levels that are likely to send global energy prices surging in the next several weeks, according to four executives.

Industry executives have flagged the issue to senior White House officials and Cabinet members in recent weeks as part of the Trump administration’s ongoing dialogue with the U.S. energy industry, the people said. The warnings came as recently as late last month as data from the U.S. Energy Information Administration and other sources began showing that fuel makers were increasingly relying on oil and fuel from their storage tanks to replace products no longer arriving from the Middle East.

“We’re at dangerously low levels already,” said one industry executive who was granted anonymity to discuss private conversations with the administration. “We have shared those concerns at the highest levels of government about what’s coming in mid-to-late June. … I hope they are paying attention to inventories right now. You’re hitting tank bottom.”