Now that the war with the Iranians appears to be fully back on, there will be no turning back now. President Trump just told reporters in the White House that "we're going to be attacking them and attacking them very hard", and so it should now be apparent to everyone that there isn't going to be any sort of a "deal" any time soon. What this means is that we are headed for a historic energy squeeze of unprecedented magnitude.

So far, we have not experienced the full consequences of the war with Iran because we have been running through commercial oil inventories and national strategic stockpiles.

But that cushion is rapidly being depleted and in the not too distant future it will be gone.

Let me try to illustrate this in a way that just about everyone will be able to understand.

If you lost your job today, you probably would still have enough money to keep paying the bills for at least a few months.

But if you didn't find a new job within a certain amount of time, you would potentially be in danger of getting kicked out into the streets.

We are facing a similar scenario with global oil supplies.

We had enough stored up to keep going for at least a few months, but some time this summer we will start hitting critical operating levels.

Once we reach that stage, gasoline prices will go nuts and shortages and rationing will begin to spread around the globe.

We won't be out of oil.

But we won't have enough for everyone to use as much as they normally would.

Today, it was being reported that by the end of this year global oil inventories will hit the lowest level since records began being kept…

Oil stockpiles in the world's largest economies are headed toward the lowest levels since at least 2003 as inventories are drawn down at a record pace due to the lost output from the Iran war, the U.S. Energy Information Administration said on Tuesday.

Total oil inventories in the members of the Organization for Economic Cooperation and Development will fall to just under 2.3 billion barrels by December, the EIA said, based on its current assumption that marine traffic through the Strait of Hormuz is unlikely to return to pre-conflict levels until early 2027. The OECD stockpile has not been this low since the EIA began keeping records in 2003, the agency said in its monthly Short-Term Energy Outlook report.

The rapid inventory drawdown, which is needed to make up for 11 million barrels a day of lost Middle Eastern output, creates the foundation for a sharp increase in oil prices in the months ahead, the agency said.