US Role as Backstop for Oil Market Is About to Hit Its Limits

The war in Iran has transformed the US into the world’s emergency oil supplier, plugging the gap created by the near-closure of the Strait of Hormuz.

But that record export surge is now peaking, according to crude market analysts. US inventories are shrinking rapidly and shipments overseas are likely to fall next month.

Crude has traded around $100 a barrel for most of May, defying the most bullish of price forecasts due to a combination of demand destruction and inventory drawdowns. But absent a diplomatic breakthrough between Washington and Tehran in the next several weeks to restart tanker traffic through ...