Key facts
- Oil inventories in OECD nations may fall to their lowest levels since at least 2003.
- Total oil inventories are projected to drop to just under 2.3 billion barrels by December.
- Drawdowns are occurring to compensate for 11 million barrels per day of lost Middle Eastern output due to the Iran war.
- Normal marine traffic through the Strait of Hormuz is not expected to resume until early 2027.
- Global oil demand is forecast to shrink by 1.1 million barrels per day this year.
Oil stockpiles in the world's largest economies are on track to reach their lowest point since at least 2003, according to a warning from the U.S. Energy Information Administration (EIA).
The EIA projects that total oil inventories among members of the Organization for Economic Cooperation and Development (OECD) will drop to just under 2.3 billion barrels by December.
This significant drawdown is occurring as top consuming nations tap existing reserves at a record pace to cover a shortfall of over 11 million barrels per day of Middle Eastern output, attributed to the ongoing Iran war. The agency's current assumption is that marine traffic through the Strait of Hormuz will not return to pre-conflict levels until early 2027.
The EIA also forecasts that global oil demand will shrink by 1.1 million barrels per day this year, reversing previous expectations of growth, and expects oil prices to remain elevated until global flows normalize and inventories are replenished.