Global oil stockpiles could hit record lows if Strait of Hormuz remains closed
Global oil inventories are rapidly declining due to supply disruptions in the Middle East, particularly if the Strait of Hormuz remains closed. The International Energy Agency has warned that this could lead to significant price increases as demand peaks this summer. Analysts indicate that stockpiles could approach record lows, stressing the supply chain further.
- ▪Global oil inventories are falling at a record pace due to supply disruptions in the Middle East.
- ▪The International Energy Agency warned of potential price spikes ahead of peak demand this summer.
- ▪By the end of April, stockpiles fell to 7.8 billion barrels and could reach 7.6 billion barrels by the end of May if demand remains steady.
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Global oil inventories are falling at a record pace to compensate for the big supply disruption in the Middle East and they will approach critical levels if the Strait of Hormuz does not reopen. Higher prices for oil and fuel are likely ahead of peak demand this summer as a consequence, the International Energy Agency warned this week in its monthly update."Rapidly shrinking buffers amid continued disruptions, may herald future price spikes ahead," the IEA said. The oil market has not felt the full impact of the supply loss thanks to commercial inventories held by the industry, strategic reserves controlled by governments and tankers in transit, Exxon Mobil CEO Darren Woods said on the oil major's first-quarter earnings call.
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