Oil Expert Who Predicted Iran War Price Spike Explains Why Reserves Won't Help

Despite a coordinated effort by the United States and its allies to drop a record amount of oil reserves onto the market, oil prices continued trending higher this week.

The International Energy Agency announced on Wednesday it would make 400 million barrels of emergency oil stocks available to the market — the largest coordinated stock release in the agency’s history. The Trump administration contributed 172 million barrels from the U.S. Strategic Petroleum Reserve as part of that effort. And yet, for one oil analyst who correctly called last week’s surge, none of that changes the most important part of the story.

Stephen Schork, principal of The Schork Group, warned Coinage that the real issue was never just a spike in panic. It was the risk of a sustained disruption to the flow of oil through the Strait of Hormuz.

“Realistically, you can only expect to get about an additional 4 to 6 million barrels a day onto the market once we start releasing,” he said. “The problem is, where you need the oil is where it's being consumed, India, China, South Korea, Japan.”

For Schork, the problem with the reserve-release story is straightforward: the barrels being offered are not necessarily the barrels the market needs most.

That is the key distinction running through his argument. Washington and the IEA can announce a huge headline number, but the market disrupted by Hormuz is not just any market. About 20 million barrels a day normally move through the Strait, and the emergency supply that can be mobilized quickly is concentrated far more heavily in the Atlantic Basin. The mismatch, in his view, means reserve releases may help calm sentiment without fully solving the actual shortage risk.

"So now we're only talking about 25% of the oil that normally flows through the Strait, and the oil that will be released is not going to be released where we need it and that is in Asia," he said.

On Thursday, the Trump administration took another step by lifting sanctions on Russian oil. Treasury Secretary Scott Bessent explained that countries would be able to buy Russian oil sitting at sea up until until April 11 as a “narrowly tailored, short-term measure."

However, that also did little to relieve pricing pressures as brent crude topped $103 a barrel on Friday. As Schork predicted at the beginning of the week, holding the $100 level is indicative of another leg higher.

“Now our ceiling now becomes our floor,” he said. “Our first target is $125-$128.”

Schork’s warning is that calm headlines and usable emergency stockpiles are not the same thing as an actual off-ramp. He contrasted the current situation with earlier conflicts where markets could see a clearer military endgame. This one, he argued, is murkier and therefore harder to price.

“The objective is open-ended,” he said, fearful that there is no foreseeable off-ramp to escalating fighting that will be required to re-open the Strait. “We are still in the middle lane of the highway, going down the highway at 100 miles an hour, nowhere near an off ramp.”

If the region absorbs another hit — especially one involving oil supplies stored in the Gulf — Schork still sees the possibility of a much uglier move higher. “That will give us the roadmap to $146, $164 oil,” he said.

For now, the market is trying to decide whether the coordinated stock release is enough to keep that scenario from coming into view. Schork’s answer is that it helps on the margins, but not where it counts most. The chokepoint is still the chokepoint. And until that changes, his view is that strategic reserves may not calm traders as fast as hoped.