Strategic Petroleum Reserves (SPRs) Depletion = Oil Supply Shortages = High Oil Price11 May 2026 12:00
As it stands, the world is mostly surviving on STRATEGIC PETROLEUM RESERVES (SPRs) - these are FINITE reserves designed to CUSHION the market and prevent oil shortages – as oil is “inelastic" - this means that when its price changes, the quantity people buy or sell barely shifts, because oil is a NECESSITY with VERY FEW, IF ANY immediate alternatives.
The world's MOST CRITICAL ENERGY ARTERY has effectively been CLOSED for 72 days as of today! - 11 May 2026. This has had very negative ramifications on SPRs all around the world. Once these finite SPRs are depleted, supply shortages will be felt in countries that have remained cushioned from oil shortages so far. It’s one thing to have to pay more for oil, but it’s a whole different—and very dark—situation when there is no oil available to buy. Asian countries like Philippines, Vietnam and India have already experienced the effects of these supply shortage shocks – and physical oil barrels have traded at significant premiums to the current oil futures prices in these regions.
Once major SPRs are depleted, the price of oil will rise significantly due to low supply and high demand. There will be no cushion to soften the blow of rising oil prices anymore. For Tullow, who operate in west Africa, far from all the narrow straits of danger - this is a time where they will be generating all-time-high income from boosted oil production and very high oil prices.
Long story short, the worse the oil supply situation gets in the Strait of Hormuz, the better it is for Tullow as they will benefit from sustained, increased oil prices.
This is not financial advice. Do your own research. Good luck all holders.
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