Institutions flag risk of Europe oil shortage by month-end as inventories slide

Several institutions are warning that global crude inventories are falling quickly, raising the risk of a fuel shortage in Europe by the end of this month, CNBC reported. Inventory rebuilding is not expected to return until December 2027. Jeff Currie, CoChairman of Abaxx Commodity Exchange, said the market may look calm, but the underlying supply system is under severe stress and Europe could face a physical shortage "at any moment." He pointed to an imminent seasonal demand lift as U.S. Memorial Day and the UK Spring Bank Holiday near, with diesel, gasoline and jet fuel consumption set to jump and tighten supply further. Société Générale analysts said the market is sustaining a "false sense of stability," describing inventories and logistics as "extremely fragile." The report added that since U.S.-Iran tensions escalated on February 28, flows through the Strait of Hormuz have been constrained. Even if navigation normalizes in early June, it would take at least 52 days for global supply chains to recover. If normalization slips to late June, inventories could weaken further, potentially lifting oil prices to $150 a barrel and keeping them elevated for the rest of the year, the report said.