MW Trump 'jawboning' has masked a global oil-supply disaster, and the reality could mean $135 crude, says industry veteran
By Barbara Kollmeyer
Author and former trader Dan Dicker says President Donald Trump's rhetoric can only take the market so far
A cargo ship carrying tires arrives at Port Sultan Qaboos in Muscat, Oman, this weekend. The Strait of Hormuz, a vital shipping route for the region's oil and gas, had effectively been blockaded since the outbreak of war between the United States, alongside Israel, and Iran in late February.
Fearful traders and a market that's being talked higher have been holding down oil prices, but one industry expert has warned a supply shock could be coming to drive crude to $135 a barrel.
"You have the rhetoric of the [U.S.] president, obviously, jawboning a market where the physical realities are starting to assert themselves, where they hadn't so much for the last three months of this war," Dan Dicker, an energy expert who spent 25 years on the New York Mercantile Exchange trading energy futures, told Bloomberg in an interview on Sunday.
Dicker, in that on-air interview, said generic stockpiles held by oil companies globally have been relied upon to make up for a 6 [million]- to 8 million-barrel shortfall, as the Iran war has kept the commodity from reaching the world's daily marketplace.
"And so you're down in the global stockpile area of about half a trillion barrels of oil globally. And that is just incredibly significant towards what's going to happen in the marketplace if a huge amount of oil doesn't reach its targets at some point pretty darn soon. And even if it does, it might not be enough to stop what is a tremendous issue with global supply," Dicker said in the interview.
West Texas Intermediate crude (CL.1) was down 0.6% at around $75 a barrel on Monday, and Brent was off 1.6% at just over $79 a barrel, after Pakistan and Qatar released a joint statement saying the U.S. and Iran had agreed to a 60-day roadmap toward a peace deal.
WTI traded as high as $112 a barrel in early April and Brent (BRN00) reached above $118 a barrel in late March as the Iran conflict intensified.
'You're sitting on a premium that the president of the United States with his mouth can destroy you every time you take a position like this.'Dan Dicker
Dicker told "Bloomberg This Weekend" hosts David Gura and Christina Ruffini that traders have been reluctant "over the course of the entire war to pay up for oil that should be a heck of a lot more than $110 or $115 [per barrel] where it ran at its height."
"And now what's happening is that the traders have been so frightened to own oil because [U.S. President Donald] Trump was announcing 32 deals every separate Sunday," he said.
When the current memorandum of understanding finally arrived, these traders were not holding long positions in oil and are now "spectacularly short at $75, $76 a barrel." In the two years prior to the war, oil was trading between $55 and $75 a barrel. That period saw the most boring action he'd seen in 20 years, with supplies steady and nothing really pressing on oil to push it higher, said Dicker.
"So looking at oil right now, particularly with the tenuous nature of this deal and what will happen with the strait, I find that the marketplace right now in gas prices is being overly - way overly - optimistic to what likely will happen over the course of the next 60 days," he said.
Dicker said traders have kept losing money on long oil positions each time Trump announces he has in hand the outlines of a deal. "You're sitting on a premium that the president of the United States with his mouth can destroy you every time you take a position like this," he said.
"Oil prices are tethered to what traders do, and the traders are not willing to buy oil for all the reasons that you've seen," said Dicker. A trader who could see oil was clearly worth $120 and not $80 a barrel would buy it, but then loses thousands of dollars once Trump talks about a deal nearing.
'The question becomes, when does the physical reality of these low stockpiles actually hit the financial markets that are controlling the price of oil?' Dan Dicker
"The question becomes, when does the physical reality of these low stockpiles actually hit the financial markets that are controlling the price of oil? And, unless this deal gets done, you know, to a much more firm degree, oil starts to flow seriously and rebuild some of those stockpiles that have been draining for the past three months, that physical market is going to assert itself in a way that we've never seen it assert itself before," he said.
Dicker, author of "Oil's Endless Bull," said what investors will not see is oil rising from $75 to $85 a barrel but rather surge from $75 to $135 a barrel possibly within a month. To that end, he said, oil executives like Chevron CEO Mike Wirth have been warning that a supply crunch is coming.
"When these stockpiles reach the physical reality of the futures markets, you're going to see a spike like you never saw before. Unless, of course, they manage to get these things significantly correct and you do start to see these oil tankers run," which, Dicker said, will be "difficult if not impossible."
-Barbara Kollmeyer
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(END) Dow Jones Newswires
June 22, 2026 08:26 ET (12:26 GMT)
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