Geopolitical Tensions Threaten $150 Oil; SLB, Japan Adapt

Oil prices could spike to $150 per barrel if the fragile U.S.-Iran ceasefire collapses, according to intelligence firm Rystad Energy. The Norway-based firm said renewed hostilities would deepen supply shut-ins in the Middle East, with war risk and a near-closed Strait of Hormuz pressuring upstream production, OilPrice.com reported.

Early on Thursday, oil prices spiked in Asian trade as the U.S. carried out strikes in Iran, and Tehran declared the Strait of Hormuz closed again. The escalation, seen as the most serious test of a ceasefire in place since early April, began Tuesday with the downing of a U.S. Apache helicopter near the Strait. U.S. Central Command disabled a tanker in the Gulf of Oman that tried to break the U.S. blockade.

Traffic through the critical chokepoint has plummeted, with current estimates at about 2 million barrels per day (bpd), just one-tenth of pre-war volumes. Vessels are increasingly switching off transponders, complicating market tracking of actual supply flows.

ExxonMobil Senior Vice President Neil Chapman warned at a late-May conference that global inventories are nearing "really, really low levels," and models suggest dated Brent crude could shoot up to $150-$160 per barrel once that point is reached, OilPrice.com reported.

In other global developments, oilfield services giant SLB signed a long-term contract with Venezuela’s PDVSA to reverse production declines and modernize the country's industry with a focus on artificial intelligence. SLB CEO Olivier Le Peuch said realizing Venezuela's resource potential would require technology and digital integration. The deal follows a U.S. takeover of Venezuela's oil sector and a surge in the country's exports, which hit a seven-year high of 1.25 million bpd in May, with the U.S. as the top buyer.

Meanwhile, Japan has secured July oil import volumes equal to last year's by tapping strategic reserves and diversifying suppliers away from the Hormuz-dependent Middle East. Japan, which previously relied on the Middle East for 95% of its oil, imported a record-low volume from the region in April. It is now boosting imports from the United States, Azerbaijan, South Sudan, and Russia's Sakhalin. As part of an International Energy Agency-coordinated release, Japan is drawing down 80 million barrels from its national reserves to help domestic refiners.

These global shifts highlight a tightening physical market and strategic pivots that could influence demand for Bakken crude. North Dakota producers face a landscape where geopolitical risk threatens extreme price volatility, while competitors like Venezuela are seeking to ramp up production with international help.