Key facts
- Global oil stocks may be insufficient to cover a prolonged U.S.-Iran conflict.
- Saudi Aramco estimates the war has caused a cumulative loss of 2.6 billion barrels.
- Government-held oil reserves are estimated to cover the current supply gap for 180 days.
- U.S. Strategic Petroleum Reserve levels are at their lowest since 1983, with infrastructure issues limiting availability.
- Global diesel and jet fuel inventories are at multi-year lows.
- China's estimated oil reserves could provide a significant buffer for its imports.
Global oil stocks are facing scrutiny as the U.S.-Iran war continues without a clear resolution, raising concerns about the adequacy of reserves to offset potential supply disruptions. Saudi Aramco estimates that the conflict has already led to a cumulative loss of 2.6 billion barrels of oil, potentially making it the largest supply disruption on record.
Analysts suggest a daily supply gap of approximately 5 million barrels per day, a figure that could widen given recent disruptions like the shutdown of the Kazakh CPC pipeline. While the International Energy Agency (IEA) has released 400 million barrels from emergency reserves and notes substantial global stocks, the usability of these reserves is a key concern. Total IEA-managed stocks, including commercial holdings, stand at 1.5 billion barrels, but only 0.9 billion are government-held and readily available to cover supply gaps. This amount could sustain the current deficit for about 180 days.
Further complicating the situation, U.S. Strategic Petroleum Reserve (SPR) crude oil stocks have fallen to their lowest levels since 1983. Deteriorating infrastructure means a quarter of the SPR's reserves are unavailable, leaving potentially only 200 million barrels accessible, enough to cover the supply gap for just 40 days, according to Rapidan Energy analysts. The depletion of global inventories has reduced the market's buffer against shocks, increasing vulnerability to sharp price increases.
Adding to the pressure, global stocks of diesel and jet fuel are at the bottom of their five-year range, exacerbated by damage to refineries in the Middle East and Russia. While total global oil stocks, including commercial and transit inventories, appear comfortable, a significant portion is not considered a true buffer. China, which does not disclose its reserves, is estimated by Energy Aspects to hold nearly 1.7 billion barrels of crude, a substantial amount that could cover its pre-war imports through the Strait of Hormuz for almost a year, offering one of the most comfortable positions among major economies.