A pump jack functions close to a crude oil deposit in the Permian Basin oil field near Midland, Texas, on February 18, 2025. Eli Hartman/Reuters
The International Energy Agency (IEA) has cautioned that global oil reserves are quickly diminishing due to supply disruptions from the Iran conflict, posing risks for future increases in oil prices.
“The globe is depleting oil stockpiles at an unparalleled rate as importing nations face extraordinary interruptions to Middle Eastern supply,” the IEA stated in its monthly oil market report issued today. “Quickly diminishing buffers amidst ongoing disruptions could signal upcoming price increases.”
Worldwide oil inventories fell by 246 million barrels from March to April, reaching 7.9 billion barrels, as reported by the IEA. The report indicates that daily reductions from global oil stockpiles in April were approximately equal to the total daily usage of Canada and the United Kingdom.
Rising supply deficits from the Strait of Hormuz, exceeding 1 billion barrels, have led to a steep decline in global oil demand as companies and consumers reduce usage due to escalating prices and diminished supply.
The petrochemical sector is facing the “steepest losses,” as there is a decline in oil and natural gas needed to produce essential products like plastics, fertilizers, and pharmaceuticals, according to the IEA.
The total flights departing globally “is still significantly lower than usual, contributing to a reduction in jet fuel prices, which almost tripled following the cutoff of Middle Eastern exports,” the agency noted.
“Rising demand destruction is supported by a spike in oil prices since the onset of the conflict.”
The IEA now projects global oil demand at 104 million barrels daily this year, 1.3 million barrels-a-day below its forecast before the war.
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