Global Oil Reserves on Brink as US-Iran War Continues
The ongoing US-Iran war is causing significant disruptions to global oil supplies. According to Saudi Aramco's head, the world has lost a staggering 2.6 billion barrels of oil since the start of the conflict, making it the largest supply disruption ever in cumulative terms apart from the 1979 Iranian revolution.
This amounts to a massive 25 days' worth of global consumption based on pre-war demand of 103 million barrels per day. However, China's reduced demand means the world is consuming less oil than before, and analysts estimate that the daily supply gap to cover demand is around 5 million bpd.
The International Energy Agency (IEA) has emergency reserves, which include government-held stocks and commercial stocks totaling 1.5 billion barrels, enough to cover the current estimated supply gap for 300 days. However, the IEA cannot order the release of commercial stocks, leaving only 0.9 billion in government-held stocks, enough to cover the supply gap for 180 days.
The US Strategic Petroleum Reserve has fallen to its lowest levels since January 1983, with only 200 million barrels available, which can cover just 40 days of the current supply gap. China's oil reserves are estimated at nearly 1.7 billion barrels, which could cover its pre-war imports for almost a year.