Oil stocks fall at record pace as Hormuz closure squeezes supply

The International Energy Agency reported Wednesday that countries are drawing down oil inventories and strategic reserves at a record pace due to unprecedented supply disruptions caused by the Middle East war. Global oil stocks fell by 117 million barrels in April, following a 129-million-barrel drawdown in March after the United States and Israel launched attacks against Iran. The IEA warned that rapidly shrinking buffers amid continued disruptions may herald future price spikes ahead. Iran has effectively closed the strategic Strait of Hormuz to Gulf oil and gas exports, sending prices soaring and forcing nations to scramble for alternative supplies. The agency had committed to providing global markets with 400 million barrels from the emergency stocks of member nations, with approximately 164 million barrels already drawn as of the report. The pace of emergency stock releases accelerated in April, with additional volumes expected to enter the market in the coming months. Fears of shortages are intensifying as the summer travel season approaches in the northern hemisphere, with airlines already warning of potential jet fuel shortages within weeks if supply disruptions persist. The agency now expects global demand to shrink by 2.4 million barrels per day in the second quarter, down from its earlier forecast of 3.5 million barrels per day before the Mideast war erupted. The IEA noted that higher prices, a deteriorating economic environment, and demand-saving measures will continue weighing on global oil consumption going forward.