Global oil inventories are running critically low: Is a genuine energy crisis about to erupt within a month?

Goldman Sachs forecasts that OECD commercial oil inventories will fall to 57 days of demand in June—the lowest level since 2018—though still above the historical average of approximately 53 days observed before the shale oil revolution (2000–2005). Notably, China and Singapore are among the few regions where refined product inventories have increased, primarily due to reduced exports of refined products. Asia-Pacific: Replacement imports can only partially offset the shortfall The Asia-Pacific region is the largest victim of this supply shock. In April, the region’s oil imports from the Persian Gulf plummeted year-on-year by 11 million barrels per day (bpd), causing total regional imports to drop by over 40%. In response, the situation for refined products versus crude oil diverges markedly across the region. For refined products, cutting exports enabled the Asia-Pacific region to offset roughly 70% of the Persian Gulf import shortfall, resulting in only a modest net decline of about 700,000 bpd in refined product imports. For crude oil, however, alternative suppliers filled less than 40% of the gap, leading to a 7-million-bpd year-on-year decline in net crude imports in April—directly constraining domestic refining capacity and refined product supply. Goldman Sachs believes that, taking into account national crude inventory levels, South Africa and India face the highest risk of refined product shortages. Geographically, recent news reports on acute shortages have shifted—from Thailand and India one month ago—to Malaysia and Bangladesh more recently—confirming the judgment that the supply shock continues to spread outward. Europe: Jet fuel shortage alert may trigger as early as June The most urgent threat facing Europe stems from jet fuel. Goldman Sachs, jointly with its European energy and transportation equity analysts, estimates that—under assumptions including restoration of Persian Gulf export flows by end-June, a 3% decline in jet fuel demand, and a 50% import substitution rate—European commercial jet fuel inventories (excluding government emergency reserves) could fall below the IEA’s critical shortage threshold of 23 days in June. The UK is considered the European country at highest risk of jet fuel rationing, owing to its greatest dependence on net imports. Although France and Germany appear to hold ample total inventories, 70–75% of those consist of government emergency reserves; their commercial inventories cover only 16 and 17 days respectively—both already below the IEA’s 23-day threshold. Real-time weekly data from the ARA region (Amsterdam–Rotterdam–Antwerp) corroborates this assessment—jet fuel inventories there are being rapidly depleted. On the demand side, JPMorgan data shows global oil demand averaged a decline of 2.8 million bpd in March, widened to 4.3 million bpd in April, and is projected to widen further to ~5.5 million bpd in May. Earlier in March, the International Energy Agency coordinated a release of 400 million barrels from member countries’ strategic reserves, with the U.S. Strategic Petroleum Reserve (SPR) accounting for nearly half of that supply replenishment. Energy giants sound the alarm collectively; markets enter countdown mode According to Bloomberg, Martijn Rats, Morgan Stanley’s strategist, and his team warned in a Monday report that if the disruption persists into late June or even July, Brent crude “will have to complete the price adjustment it has so far managed to avoid.” Their base-case scenario projects Brent averaging $100/bbl in Q3, falling to $90/bbl in Q4, and declining further to $80/bbl by 2027. However, under the worst-case scenario—where U.S.–China buffer stocks are exhausted—Brent could surge to $130–$150/bbl *before* any “reopening rescue” arrives.

Will global oil inventories run out?

Wall Street is closely monitoring the rapid drawdown of global crude inventories. Will global oil inventories run out? On May 6, according to Wind Trading Desk, Goldman Sachs explicitly stated in its latest research report that global overall inventories are unlikely to fall below minimum operational levels this summer—but the real crisis lies in severe regional and refined-product-specific shortages. The report notes that global oil inventories are now approaching their lowest level in eight years, with a depletion rate that is deeply concerning. Goldman Sachs argues that macro-level “aggregate safety” masks a micro-level “structural crisis”—with naphtha and liquefied petroleum gas (LPG), as well as jet fuel, facing the most imminent shortage risks. The Asia-Pacific region (excluding China) and Europe will bear the brunt. The firm also points out that, as the shock spreads westward, the initial phase of panic-driven hoarding has ended—but regional supply-chain disruptions and price volatility will provide crucial guidance for structural trading in energy markets. Global inventory totals: Not yet at bottom—but depletion pace alarming Goldman Sachs estimates that current global oil inventories—including visible and “invisible” stocks (covering crude and refined products, onshore and floating, commercial and strategic reserves)—stand at approximately 101 days of global demand (DoD), down 4 days from 105 days at end-February. At the current monthly drawdown rate of roughly 3 days, inventories are expected to fall to 98 days by end-May. This figure remains, on the surface, well above two key warning thresholds: ・The EU’s mandated minimum emergency reserve of 61 days; ・The estimated global onshore minimum operating inventory of ~30–40 days. Yet Goldman Sachs explicitly cautions that aggregate figures severely underestimate regional and product-specific shortage risks. Surpluses in one region cannot be promptly deployed to offset deficits elsewhere—this mismatch lies at the heart of the current crisis. Notably, even if Strait of Hormuz export flows resume soon, global visible oil product inventories may still hit a record low since 2018—because full normalization of deliveries would take at least several weeks. Goldman Sachs forecasts that OECD commercial oil inventories will fall to 57 days of demand in June—the lowest since 2018—yet still above the pre-shale era (2000–2005) historical average of 53 days. Refined products: Fastest-depleting, highest-risk segment The report states that, among all inventory categories, onshore commercial refined product inventories are depleting fastest, are least visible, and concentrate the highest risk. Goldman Sachs estimates global commercial refined product inventories have plunged from a pre-crisis 50 days to the current 45 days, with: ・OECD refined product inventories falling from 40 to 38 days (a 5% decline); ・Non-OECD refined product inventories plunging from 49 to 43 days (a 10% decline)—the most severe drawdown segment. By contrast, global onshore commercial crude inventories remain broadly flat (at 39 days), offering some buffer to countries with refining capacity. Visible data reveal particularly alarming product-specific crises: Naphtha inventories at Fujairah Port, UAE, have plunged 72% since end-February; naphtha inventories at the Northwest European ARA storage hub have fallen 37%; gasoline inventories at ARA are down 13%, jet fuel down 32%, and diesel down 15%.

APPEC: Global Oil Industry Prepares for 'War of Attrition'

5 days ago

At the APPEC conference, industry leaders anticipate long-term supply constraints due to Middle East conflicts, shifting the oil market from short-term shocks to chronic shortages. S&P Global forecasts Brent crude prices to remain between $80 and $100 per barrel through 2027.

ccin

2026-04-23

S&P Global cuts 2026 oil demand forecast by 700,000 bpd due to Iran war

2026-04-24

P&G Warns of $1 Billion Profit Hit in Fiscal 2027 from Higher Oil Prices

2026-05-29

South Africa Unveils $228 Billion Green Bond Framework for Decarbonization

2026-09-16

APPEC: Global Oil Industry Prepares for 'War of Attrition'

APPEC: Global Oil Industry Prepares for 'War of Attrition'

FAQ