Low Global Oil Inventories Undercut Hopes for a Quick Iran-Related Supply Recovery

Even as reports fuel optimism about a U.S.-Iran peace deal, a rapid normalization of oil flows through the Strait of Hormuz is unlikely, with insurers, shipowners and refinery restarts expected to take weeks. Global crude inventories have been drawn down to very low levels, with Cushing stocks at about 21 million barrels near operational constraints. Analysts and oil executives have warned that June and July could bring “minimum operational levels” of inventory, while physical-market prices trade at a premium to futures benchmarks.