Oil faces 'trigger point' in July, expect prices to soar: Expert

Added: 2026-05-25

[00:00:00]If there state of hormones remain closed for 6 months for example or 4 months, it's a global disaster.

[00:00:06]And the price of oil will be $200 a barrel and there will be global recession. So, nobody wants to think about the worst case scenario. So, everybody thinks every news is good news. And of course President Trump changes his mind all the time. He goes back and forth, confuses the market, and the equity markets uh eat from his lap. They they really think that this is a change. There is no change. There is no We are not no nearer a peace agreement than we were several weeks ago. And do you think that this actually might be detrimental in the fact in that if we continue to see traders trying to trade too quickly or perhaps celebrating climbing the mountain when they have it they just put on their gear as you mentioned. Do you think this creates a vicious cycle where you actually feed into the volatility?

[00:00:51]And what would your advice be as a veteran oil trader approaching a lot of this volatility? Do you just get a head try to get ahead of it by any means necessary or do you think that more prudence actually is needed because of what we've seen play out over the last few months? I think more prudence is needed. You know, your charts here show 13 million barrels per day of the traffic but that's actually just crude.

[00:01:12]You have to add 5 million barrels per day of products to it. So, 18 million barrels per day is a traffic and from that volume uh huge amounts of uh volumes are held back. What goes through is maybe a million barrels per day at most. So, the market is absolutely short. And sooner or later we get to trigger point. Sometimes in July we get to trigger point where the prices will go for a huge jump. And so we have to be ready for that to happen. And to think wishful thinking that somehow we're going to get past over it or Trump is going to negotiate a deal, I think it's just misreading the market.

[00:01:53]>> that Jeff Currie brought up earlier on when Lisa Kim spoke to him uh was that he does think that US might actually start to feel the pain come July. Now, we've heard from the American side that they've said, "Hey, we don't need this deal or actually energy independent, so we don't actually aren't affected by this." Do you think that might also be an overestimation? Do you think that there might be a pain point that come comes to the United States by July? Also take into account that while they have a lot of this oil, many of the refineries, about 80% of it, is set up to refine heavy crude and not their own light crude actually. What are your thoughts there, Dr. Fesharaki?

[00:02:23]>> huge importers of middle distillates, particularly Saudi Arabia, where they have their own refinery in the US.

[00:02:29]So, can it be managed? Can they use their own crude instead? They can, but at a less efficient operation and lower margins. So, these kind of things can be managed, but the question really is that when the price of oil goes up to $200 a barrel, everybody in the US will pay the same price. You can't say that, well, you are shielded because you have your own oil. No, the global market is interconnected. It's one big swimming pool. Everything is connected together.

[00:02:55]So, the US will pay $6, $7 a gallon for gasoline prices. And that is the the nightmare dream for a midterm elections for the United States.

[00:03:06]>> think it happens in July? Do you think it happens earlier, Dr. Fesharaki?

[00:03:09]>> No, I think July, August. This will happen. The trigger point is coming uh in July. I see. Um let's talk about a possible best-case scenario if I can point paint one, uh Dr. Fesharaki, where we see the Strait of Hormuz normalize, but that would also mean that some of Iran's demands are met, including the possible imposition of a toll for oil prices. So, even if that even if we see a normalization, that could mean slower out throughput of oil through the Strait of Hormuz because of this toll toll mechanism and perhaps also an additional tax on oil coming out there. How much does that cap or perhaps limit the possibility of oil normalizing if we see a toll imposed by Iran and if they also get the Omanis to agree to that as well?

[00:03:47]It can work.

[00:03:48]Uh our contact with the buyers is that the buyers are willing to pay $1 a barrel?

[00:03:54]They don't think it's a big deal. It's a dollar barrel. That's what Dollar barrel. What they what what Iranians are asking. The total revenues for not just crude products, LNG, and cargo ships could be anywhere between 40 to 50, 60 billion dollars a year. Bigger than Iran's total oil revenue. So, very hard to let they get the Iranians to give this up without a major gain. And that major gain is not in front of them to tell them "You give me all your nuclear uh enriched uranium, and you do this, and you do that." Well, why should they do it? Mhm. So, it has to be a major gain for them.