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Energy Crisis to Deepen as Hormuz Closure Drains Reserves, Says Commerzbank

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Oil reserves among member states of the Organisation for Economic Co-operation and Development can theoretically buffer against the current energy crisis for 15 months but shortages in products like European jet fuel could materialize by late summer, Commerzbank analysts said on Friday.

The closure of the vital marine chokepoint has knocked out about 13 million barrels per day of crude and condensate flows accounting for a staggering 12% of total global oil demand.

While aggregate global reserves currently hover at nearly 8 billion barrels, or roughly 80 days of global consumption, the bank cautions that a purely mathematical approach to inventory longevity masks severe near-term risks.

Focusing strictly on the OECD, whose total inventories are just over 4 billion barrels, Commerzbank calculates a net available pool of 2.6 billion barrels, assuming governments fully deploy their 1.2 billion barrels of strategic reserves and draw down half of all industry commercial holdings.

Assuming a steady shortfall among OECD countries estimated at 5.7 million barrels per day, these available stockpiles would theoretically insulate Western economies for about 15 months, cushioning them to an extent until mid-2027, the bank said.

However, the bank stresses that this timeline represents a best-case scenario that ignores acute regional dependencies and product-specific imbalances.

The most immediate operational threat is a looming mid-summer shortage of aviation fuel across Europe, the analysts said.

Prior to the conflict, European nations relied on the Gulf region to supply the vast majority of their 550,000 barrels per day of net jet fuel imports.

Alternative suppliers, including the US and Nigeria, have proven incapable of fully offsetting the deficit, pushing jet fuel inventories in the Amsterdam-Rotterdam-Antwerp refining hub to a six-year low.

Industry estimates cited by Commerzbank indicate that European jet fuel stocks are currently shrinking at a rate of 230,000 barrels per day.

Consequently, regional inventory coverage is projected to drop to just over 30 days by the end of June, putting the aviation sector dangerously close to the 23-day threshold required to prevent severe physical supply disruptions at major international airports.

Compounding these structural vulnerabilities are mounting political risks stemming from the US.

In recent weeks, US energy companies have stepped into the supply breach by maximizing product exports to Europe, driving American middle distillate stocks down to their lowest levels since 2005.

With domestic gasoline inventories also sitting well below seasonal averages ahead of the high-demand summer driving season, the current administration faces intense political pressure, the analysts said.

Ahead of the critical phase of the US midterm election campaign kicking off around Labor Day on September 7, Commerzbank warns that the White House may restrict crude and product exports to curb domestic pump prices.

"Furthermore, all calculations are subject to the assumption that no further supply disruptions occur, such as export restrictions in the US, which are entirely possible," the bank noted.

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