Global Oil Stocks Drop at Record Pace After Strait of Hormuz Disruption

Global oil stocks declined by 246 million barrels during March and April, and the pace of withdrawals reached a record 8.7 million barrels per day in May. The shutdown of the Strait of Hormuz has cut off 25 percent of the world’s seaborne oil shipments, according to the report.

United States Strategic Petroleum Reserve The U.S.

Strategic Petroleum Reserve fell 9.1 million barrels in the week ended May 22, leaving 365 million barrels in storage. The prior week recorded the largest single-week draw in the reserve’s history at 9.92 million barrels.

Commercial oil stocks are also declining rapidly. Neil Shearing, chief economist at Capital Economics, wrote on May 18 that inventories “could reach critically low levels by the end of June” if current draw rates continue. Jeff Currie stated that Asia is already near minimum operating levels and that the United States could face shortages by July.

Nissan began rationing 5W-30 and 0W-20 motor oils after its inventory fell 30 percent year-over-year. The company instructed dealers to prioritize warranty, recall, and prepaid maintenance work. The report also noted that global fertilizer production has been reduced because of sulphur shortfalls linked to the strait closure, raising the prospect of lower crop yields in future harvests.