Iran Conflict Accelerates Drawdown of Global Oil Buffers to Record Speed

Odaily Planet Daily reported that disruptions to oil shipping in the Persian Gulf stemming from the Iran war are draining global inventories at an unprecedented pace, eating into buffer stocks designed to cushion supply shocks. The faster-than-normal drawdown is pushing markets closer to sharper price spikes and potential shortages. With the Strait of Hormuz approaching nearly two months of near-closure, governments and industry have fewer levers to offset the impact of more than 1 billion barrels of lost supply. Analysts warn the depletion also leaves markets exposed for longer, even after the conflict ends, by reducing the safety margin against future disruptions. Morgan Stanley estimates global oil inventories fell by about 4.8 million barrels per day on average between March 1 and April 25, a pace well above the previous quarterly peak for inventory declines recorded by the International Energy Agency. Crude oil made up nearly 60% of the drop, with the rest in refined products. Natasha Kanew, JPMorgan's global head of commodities research, said the oil system requires a minimum inventory level, meaning the unusable portion of strategic reserves is reached before inventories actually hit their lowest point. (Jinshi)