Global Oil Stockpiles Plunge to Record Lows Amid Middle Eastern Tensions

The U.S. Energy Information Administration reports a record depletion in oil inventories across major economies due to the Iran war's impact, predicting increased oil prices. Global demand is expected to drop for the first time since 2020 as high oil prices and conservation efforts unfold.

Oil stockpiles in the world's largest economies are rapidly declining, reaching their lowest levels since at least 2003. This depletion stems from lost output due to the Iran war, the U.S. Energy Information Administration (EIA) announced.

The OECD oil inventories are projected to fall below 2.3 billion barrels by December, driven by disruptions in the Strait of Hormuz. This critical waterway, which facilitates 20% of global oil shipments, is anticipated to remain below pre-conflict traffic levels until early 2027.

The significant drawdown in inventories to compensate for the Middle East output loss of 11 million barrels per day could lead to spiked oil prices. While the U.S. and Iran are nearing a deal to reopen the Strait, uncertainty remains, with Brent crude prices expected to average $105 per barrel in the coming months.