Global oil stockpiles could fall to ‘critical levels’ by summer, IEA warns
Even China’s inventories are now starting to decline, with Gulf oil supplies likely to take months to recover even if a peace deal is agreed
While China’s crude reserves remain relatively resilient, its onshore volumes have also begun to fall, analysts said.
“We’re seeing stock draws continuing into the summer, and with the possibility or the likelihood that we reach critical levels or historical low levels just ahead of the peak summer demand,” said Toril Bosoni, head of the IEA’s oil industry and markets division.
It could take six to eight months to reopen the Strait of Hormuz even if an agreement were reached today, added Bosoni, who was speaking at the S&P Global Energy Middle East Petroleum and Gas Conference in London on Tuesday, per Reuters.
As global supplies have plunged, countries around the world are rapidly burning through their oil stockpiles. Total observed global crude inventories were drawn down by 250 million barrels over March and April, according to an IEA report last month.
“The scale of the supply losses is so big that the reduction would have to come from the demand side,” Bosoni said.