Oil Supplies Set to Tighten Further Despite Potential Peace Talks
The global energy system is bracing for even tighter oil supplies in the coming weeks, despite potential peace talks between the US and Iran. According to major energy companies, investment banks, and market analysts, it will take weeks for oil shipments from the Middle East Gulf to resume and reach refineries worldwide.
Temporary buffers such as commercial stockpiles, oil in transit or held in storage at sea, and emergency reserves have been depleted rapidly, with executives estimating that global hydrocarbon stock draws have resulted in at least 500 million barrels already consumed from stockpiles.
Even if the conflict ends soon, it will take months for Middle East production and exports to return to pre-war levels. Goldman Sachs expects crude stockpiles to drop to their lowest level since 2018, stressing the global energy system and extending the time for oil producers and refiners to relieve supply shortages.
Experts predict that it would take at least six months for the market to get back to normal, with some countries facing severe fuel shortages. For example, Australia plans to spend $7.22 billion to build up its fuel reserves, while the European Commission considers reviewing the EU's requirement for countries to hold at least 90 days of oil stocks.