Geopolitical Turmoil Triggers Record Oil Supply Drop

Global oil supplies have fallen by about 11.1 million barrels per day since the conflict escalated in late February, equivalent to roughly 10% of worldwide oil demand.

This has pushed global oil inventories to record lows, according to JPMorgan strategists led by Natasha Kaneva.

Despite worsening geopolitical risks, oil prices remain below their peaks seen earlier in the conflict. Brent crude recently climbed above $101 per barrel last week, while U.S. WTI crude moved past $92.

The main reason oil prices have not surged further is the sharp decline in demand. Oil consumption has weakened more rapidly than at any time in the past six years, excluding the pandemic-driven collapse in 2020.