The International Energy Agency (IEA) has stated that global commercial oil inventories are shrinking rapidly amid the war with Iran and the closure of the Strait of Hormuz to shipping. According to the agency's assessment, current stockpiles may only last for a few weeks.
WHAT THE IEA CHIEF SAID
According to Reuters, IEA chief Fatih Birol issued a warning during a meeting of G7 finance ministers in Paris. He told journalists that commercial oil inventories are depleting rapidly due to the conflict surrounding Iran and disruptions to supplies through the Strait of Hormuz.
According to Birol, the release of oil from strategic reserves has added around 2.5 million barrels per day to the market, but these stockpiles are 'not infinite'. He noted that commercial reserves would last for a few weeks, but the rate of depletion remains high.
WHY OIL DEMAND IS RISING
Fatih Birol also linked the accelerated drawdown of inventories to a seasonal increase in demand in the Northern Hemisphere. The spring planting campaign and the summer tourist season are boosting consumption of diesel, fertilisers, aviation kerosene and petrol.
The IEA chief stated that a perception gap has emerged in the oil market between the physical and financial segments.
HOW THE MARKET SITUATION HAS CHANGED
According to Birol, before the strikes by the US and Israel on Iran at the end of February, the oil market had seen a significant surplus, and commercial inventories were at high levels. However, after the war began, the situation changed dramatically.
According to the IEA's forecast, global oil supply in 2026 will fall short of demand because of the conflict in the Middle East. Previously, the agency had expected an oil surplus this year.
WHAT IS KNOWN ABOUT THE DRAWDOWN OF INVENTORIES
According to the latest monthly IEA report, global observed oil inventories in March and April 2026 fell by a record 246 million barrels.
The IEA, which brings together 32 countries, agreed in March 2026 to the largest-ever release of strategic reserves — 400 million barrels of oil. As of 8 May, around 164 million barrels had already been released to the market.
The agency has also revised its forecast for global oil supply. Supply is now expected to fall by approximately 3.9 million barrels per day over the course of 2026. The previous forecast had anticipated a reduction of 1.5 million barrels per day.