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 cuts in refined product exports. 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 imports to drop by over 40%. In response, the situation for refined products versus crude oil diverges markedly across the region. For refined products, export reductions enabled the Asia-Pacific region to offset roughly 70% of the Persian Gulf import shortfall, resulting in only a ~700,000 bpd decline in net 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, when factoring in 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 ongoing outward spread of the supply shock. Europe: Jet fuel shortage alert may trigger as early as June Europe’s most urgent threat stems from jet fuel scarcity. Goldman Sachs, jointly with its European energy and transportation equity analysts, estimates that, under assumptions including normalization of Persian Gulf export flows by end-June, a 3% decline in jet fuel demand, and a 50% import substitution rate, Europe’s 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 deemed the European country at highest risk of jet fuel rationing, owing to its greatest reliance 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 are depleting rapidly. On the demand side, JPMorgan data shows global oil demand averaged a decline of 2.8 million bpd in March, with the tracked decline widening to 4.3 million bpd in April and projected to further widen to ~5.5 million bpd in May. Earlier in March, the IEA coordinated a release of 400 million barrels of strategic reserves among member countries, with the U.S. Strategic Petroleum Reserve (SPR) accounting for nearly half of that supply replenishment. Energy giants sound the alarm—markets enter countdown mode According to Bloomberg, a team led by Morgan Stanley strategist Martijn Rats warned in a Monday report that if disruptions persist into late June or even July, Brent crude “will inevitably have to complete the price adjustment it has thus far managed to avoid.” Its 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.

What is the truth behind the oil market? Morgan Stanley: OPEC’s output increase is nominal only, spare capacity is lower than believed, and real demand is stronger than assumed.

The global oil market may have been misled by 'fake data' for years. Morgan Stanley’s latest research report reveals that OPEC’s production increases may be little more than a numbers game, actual spare capacity is far lower than widely assumed, and robust underlying demand—long overlooked—is quietly reshaping the future trajectory of oil prices. On October 18, according to Wind Trading Desk, Morgan Stanley’s latest report unveiled a startling phenomenon in the oil market: unprecedented divergence—up to 2.5 million bpd—among major data providers’ estimates of OPEC crude output. The firm’s lead analyst Martijn Rats and his team, through in-depth analysis, conclude that adopting more accurate production data yields three paradigm-shifting insights: OPEC’s announced output hikes are effectively “in name only”; true spare capacity is substantially lower than expected; and global oil demand—and its growth—is significantly stronger than commonly perceived. The report states first that OPEC’s announced production increases may be “in name only”—quota hikes merely catch up with already-existing actual output, rather than delivering genuinely new supply. Second, this implies OPEC’s real spare capacity is far below consensus expectations—currently standing at only ~2.9 million bpd, near historic lows. Most critically, if OPEC output has indeed been underestimated—and that unaccounted-for crude has not entered observable inventories—there remains only one plausible explanation: global oil demand and its growth have likewise been systematically underestimated. Morgan Stanley accordingly revised its outlook: although short-term oversupply pressures will continue to weigh on prices, stronger underlying demand coupled with limited scope for supply growth suggests the oil market may rebalance in the second half of 2027, with Brent crude potentially recovering to $65/bbl. The OPEC output data fog: Divergence reaches record levels The report notes that the core contradiction in today’s oil market lies in an increasingly thorny issue—the reliability of OPEC production data. Morgan Stanley tracks six professional data providers—Argus, the U.S. Energy Information Administration (EIA), Energy Aspects, the International Energy Agency (IEA), Rystad Energy, and S&P Global Commodity Insights—whose OPEC crude output estimates showed errors of only 400–500 thousand bpd during 2020–2022. But divergence began emerging in early 2023 and widened to a persistent gap exceeding 1.5 million bpd by 2025. More strikingly, incorporating Petro-Logistics’ data further widens the gap. In September 2025, the difference between the highest and lowest estimates reached 2.5 million bpd—a figure equivalent to Morgan Stanley’s forecast surplus for 2026, and certainly no trivial statistical error. After consulting numerous physical market participants, Morgan Stanley received an unexpected consensus: most industry insiders consider Petro-Logistics’ estimates “the most accurate.” The firm has specialized in OPEC production estimation for over 45 years, drawing on an extensive information network, satellite tanker tracking, official government reports, and transparent methodology for data construction. Morgan Stanley states that if Petro-Logistics’ higher estimates indeed reflect reality, this would fundamentally reshape market understanding of OPEC capacity, demand, and the path toward rebalancing.

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Morgan Stanley Sees Fuel Tightness Persisting Through Mid-2027

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