Global oil stockpiles hit crisis low amid Hormuz blockade

Global oil inventories are being depleted at an unprecedented rate as the Iran war continues to block the Strait of Hormuz, with stockpiles drawn down by approximately 4.8 million barrels per day between March 1 and April 25 according to Morgan Stanley data, far exceeding any previous quarterly decline on record. The two-month disruption has removed more than a billion barrels of supply from global markets, leaving governments and industries with severely diminished buffers against further shocks. JPMorgan Chase's head of global commodities research, Natasha Kaneva, warned that OECD inventories could reach "operational stress levels" by June and "operational minimum" levels by September, noting that the world cannot draw down to zero since operational systems require minimum stock levels to function. The immediate pressure is most acute in fuel-import-dependent Asian nations, with traders identifying Indonesia, Vietnam, Pakistan and the Philippines as facing potential shortages within a month. Japan's stockpiles have dropped by 50 percent since the conflict began, reaching a 10-year seasonal low, while India's reserves have fallen 10 percent. In Europe, jet fuel inventories at the Amsterdam-Rotterdam-Antwerp hub have plunged by a third to a six-year low, with the UK, Germany and France identified as most vulnerable as summer travel demand rises. The crisis has already sent jet fuel prices to around $181 per barrel globally, roughly double pre-war levels, prompting Lufthansa to cancel 20,000 flights through October and contributing to Spirit Airlines' collapse, while American Airlines faces an additional $4 billion in fuel costs this year. Governments have pledged to release a record 400 million barrels from emergency reserves coordinated by the International Energy Agency, with the United States having utilized roughly 79.7 million of its committed 172 million barrels. However, analysts warn that strategic reserve releases temporarily ease prices but further erode the global safety buffer. The crisis has renewed focus on sustainable aviation fuel as an alternative, though it currently constitutes just 0.7 percent of global kerosene consumption at approximately two million tonnes annually, with potential feedstock from used cooking oil limited to around 20 million tonnes globally. Even if the Hormuz blockade ends, experts indicate supply chain bottlenecks will persist for months and a restocking phase will likely follow as countries and companies rush to rebuild depleted inventories.