Global Oil Stocks on Thin Ice Amid US-Iran War

The ongoing US-Iran war has sparked concerns about global oil stocks being able to withstand the supply disruption. According to estimates, 2.6 billion barrels of oil have been lost since the start of the conflict, which is equivalent to 25 days of global consumption based on pre-war demand.

However, China's reserve of 1.7 billion barrels could cover its pre-war imports through the Strait of Hormuz for almost a year, making it one of the most comfortable levels in major economies alongside Japan.

The International Energy Agency (IEA) has announced a release of 400 million barrels from emergency reserves and claims that global stocks are sufficient to offset the current estimated supply gap. However, the IEA cannot order the release of commercial stocks, leaving only 0.9 billion barrels in government-held stocks, which could cover the supply gap for 180 days.

Crude oil stocks in the US Strategic Petroleum Reserve have fallen to their lowest levels since January 1983, with a quarter of reserves no longer available due to deteriorating infrastructure.