Oil stocks in the world’s largest economies are heading towards their lowest levels since at least 2003, with the reduction at an accelerated pace due to the interruption in production resulting from the conflict with Iran, the United States Energy Information Administration (EIA) reported this Tuesday (9).
Total oil stocks in Organization for Economic Co-operation and Development (OECD) member countries are expected to fall to just under 2.3 billion barrels by December, according to the EIA. The projection takes into account the current scenario in which maritime traffic through the Strait of Hormuz is unlikely to return to pre-conflict levels before the beginning of 2027.
According to the agency, OECD stocks have not reached such a low level since the beginning of the EIA historical series, in 2003. The information is contained in the monthly Short-Term Energy Outlook report.
The accelerated reduction in inventories, necessary to compensate for the loss of 11 million barrels per day (bpd) in production in the Middle East, paves the way for a sharp rise in oil prices in the coming months, the agency highlighted.
Recent reports that the United States and Iran are close to an agreement to reopen the Strait of Hormuz, a strategic route that accounts for around 20% of global oil shipments, have put downward pressure on prices in recent weeks.
“At the time of publication of this report, the agreement had not yet been finalized. Much of the region’s oil production remains halted, and global stocks continue to fall to meet demand,” said the EIA.
According to the agency, the price of Brent oil, a global reference, should be around US$105 per barrel in June and July on the spot market, well above the US$91.60 per barrel recorded on the futures market this Tuesday.
“Due to the magnitude of the draw in global stocks, we project that oil prices will remain elevated until global flows return to normal levels and stocks are replenished,” the agency added.
Fall in global demand
The EIA also stated that high oil prices, reduced fuel availability and government initiatives aimed at energy conservation will lead to a drop in global oil demand this year, the first since the downturn caused by the pandemic in 2020.
Now, the agency predicts a reduction in global demand of 1.1 million barrels per day in 2026, reversing its previous projection of an increase of 200 thousand barrels per day.
