Global Oil Stocks Face Test as US-Iran War Enters Sixth Month
The ongoing US-Iran war has raised concerns about global oil stocks being sufficient to withstand supply disruptions. According to Reuters calculations, the world has lost 2.6 billion barrels of oil since the start of the conflict, making it the largest supply disruption in cumulative terms apart from the 1979 Iranian revolution.
This amounts to a massive 25 days of global consumption based on pre-war demand of 103 million barrels per day. However, China has reduced its oil demand in recent months, and some analysts believe the daily supply gap to cover demand is around 5 million bpd, despite Saudi Aramco estimating an 11 million barrel loss from the Gulf daily.
The International Energy Agency (IEA) estimates that global economy still has substantial stocks, with a total of 1.5 billion barrels in emergency reserves. This includes government-held and commercial stocks, but the IEA cannot order the release of commercial stocks for operational reasons.
The agency's remaining government-held stocks, totaling 0.9 billion barrels, are enough to cover the supply gap for 180 days. The IEA said it is ready to release more if the crisis worsens, but its exact reserves composition is not disclosed.