Global inventories of crude oil and petroleum products are declining at an unprecedented rate this month, according to a report by Goldman Sachs Group Inc. The prolonged war in the Middle East continues to block supplies, forcing the market to use up accumulated reserves.
“Physical markets continue to tighten. According to our estimates, oil exports through the Strait of Hormuz remain at an extremely low level – just 5% of normal,” experts said, referring to a waterway under a double blockade by Iran and the US.
The global energy market is experiencing a powerful supply shock, which leads to a rapid erosion of reserves accumulated before the crisis. In parallel, governments are coordinating the release of oil from strategic reserves in an attempt to curb price increases.
Last week, Fatih Birol, executive director of the International Energy Agency (IEA), warned of an accelerated drawdown of commercial inventories. The agency estimates that the market will experience “severe shortages” until at least October, even if the conflict ends soon.
The shortage has affected all regions
Goldman Sachs analysts emphasize that about two-thirds of the fall in inventories in May was due to the so-called “oil on the water” (raw materials in tankers): the fall in exports outpaced the decline in imports.
The decline in imports is “spreading from Asia to Europe”. In particular, jet fuel imports to Europe are now 60% below 2025 averages. Nevertheless, total world stocks are still at last year’s level, thanks to a “significant buffer” built up in the nine months before the war began.
In China, refineries are showing a “lack of appetite” for crude, reflected in a sharp drop in imports. Domestic fuel sales in China plunged 22% last month, which the bank’s economists attribute to a general slowdown in economic activity in the country.
In the US, national oil inventories, including the Strategic Petroleum Reserve (SPR), fell sharply last week amid record exports. Stocks in Cushing (Oklahoma) continue to approach the technological minimum – the so-called “bottom of the reservoirs”.
