The International Energy Agency (IEA) has warned that global oil inventories are being drawn down at an unprecedented pace as the closure of the Strait of Hormuz continues to choke shipments. The Paris-based agency said rapidly shrinking buffers amid ongoing disruptions increase the risk of future price spikes.
The IEA said the vital waterway has been effectively closed for more than 10 weeks, restricting flows of Gulf crude and gas and forcing major consumers to tap emergency supplies. It estimated the sustained instability could reduce global oil supply by about 3.9 million barrels per day through 2026.
While a worsening economic outlook is expected to trim consumption, the agency cautioned that falling demand will not be sufficient to offset the large loss of supply. To cover the shortfall, countries have aggressively drawn on both commercial stockpiles and strategic petroleum reserves.
The report highlighted dramatic stock declines: global inventories fell by an estimated 129 million barrels in March and another 117 million barrels in April, record monthly drains that underscore how quickly buffers are being exhausted.
In response, the IEA has advanced plans to release a combined 400 million barrels from emergency reserves held by member states. About 164 million barrels have already reached the market, but the agency stressed the situation remains fragile.
The IEA warned that higher crude prices, economic deterioration and demand-saving measures will further influence consumption patterns, but are unlikely to fully close the supply gap created by the Hormuz disruption.
The timing is acute: the near-term squeeze coincides with the start of the peak summer travel season. Airlines have already sounded alarms about the potential for jet fuel shortages within weeks if the bottleneck persists.
The IEA added that the longer the effective closure of the Hormuz route continues, the greater the chance that volatility will spread through global energy and financial markets, amplifying price and supply risks for businesses and consumers.
This notice reflects syndicated reporting and updates from the IEA; details are based on the agency’s recent market assessments and member-state reserve releases.
