Exxon warns: stocks are running low and oil is nearing $160. Risk of a serious crisis in Europe.

31 May 20261 week babelfish

The warning comes from the highest levels of the energy industry and is very clear: energy prices could explode in the coming weeks. Neil Chapman , vice president of ExxonMobil, spoke bluntly at the recent Bernstein Conference in New York. According to his analysis, the price of crude oil could soon reach $150 or even $160 a barrel. The main cause is the depletion of physical supplies, which are hitting rock bottom.

On the same day this alarm was raised, Exxon shareholders approved the company's headquarters move from New Jersey to Texas. CEO Darren Woods justified the move by praising Texas' clearer and more favorable rules, a state that "understands our business." A pragmatic move toward a more welcoming environment for businesses.

The illusion of cheap oil

Why haven't prices already skyrocketed? Chapman offers a very practical explanation. The illusion of a stable market has been kept alive only by massive government intervention.

Normal commercial stocks (oil, gasoline, diesel, jet fuel) are almost completely consumed.
To avoid panic and compensate for this shortfall, many Western countries have poured their strategic oil reserves onto the market.

This defense mechanism has worked, artificially lowering costs, but it has an expiration date. "It can't last forever," Chapman emphasized. When strategic reserves run out, the market will experience an upward shock.

The geopolitical factor

It's true that markets have recently breathed a sigh of relief. The price of "Dated Brent" crude oil (the main global benchmark for oil actually on ships, physically available) fell from an average of $117 in April to around $103 in May. This decline was driven by positive news about a peace agreement and an extension of the ceasefire between the United States and Iran.

However, we must look at the bigger picture: prices remain much higher than before the start of military operations between the United States, Israel, and Iran in late February and early March, when crude oil was hovering around $75 a barrel.

The economic impact: a disaster waiting to happen for Europe

If Exxon's scenario were to materialize and oil reached $160, the consequences for the real economy would be severe. But the impact wouldn't be the same for everyone.

Geographic Area	Growth Impact (Quarterly)	Economic and Social Consequences
United States	-1.0%	Medium recession. The impact is strong but partially absorbed by domestic energy production.
European Union	From -1.5% to -2.0%	Sharp recession. Dramatic increase in unemployment and collapse in domestic demand.

According to our forecasts, based on what economists have said so far, a price of $160 would trigger a moderate-intensity recession in the United States. The American economy would slow, recording a loss of quarterly growth of about one percentage point. However, with strong domestic production, the US would be able to partially cushion the blow.

For the European Union, on the other hand, a real disaster looms. Europe imports almost all of its energy. Such a drastic increase in production and transportation costs would immediately translate into higher prices for citizens. Families, with no money left to spend, would cut back on consumption, causing demand to collapse.

This would lead to a decline in European gross domestic product of between 1.5% and 2%. The most painful outcome would be a sudden surge in unemployment. Faced with this scenario, European Union countries appear completely unprepared. Without rapid and decisive action to avoid this oil shortage, we risk a crisis so severe that numerous legal safeguards could be undermined.

The article "Exxon Alert: Stockpiles Running Dry and Oil Heading for $160. Risk of a Serious Crisis in Europe" comes from Scenari Economici .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/allarme-exxon-scorte-a-secco-e-petrolio-verso-i-160-dollari-rischio-di-una-grave-crisi-in-europa/ on Sun, 31 May 2026 10:33:44 +0000.