Oil & Energy
Global Oil Stocks Plummet at Record Pace as Hormuz Crisis Shuts in 14 Million Barrels, Says IEA
More than ten weeks into the Middle East conflict, the global energy market is grappling with an unprecedented supply shock that has shut in 14.4 million barrels per day of Gulf production, according to the International Energy Agency's oil market report released on Wednesday.The effective closure of the Strait of Hormuz has already resulted in cumulative supply losses exceeding one billion barrels, forcing global oil inventories to draw down at a record pace of 4 mmbbl/d over March and April, the agency noted.The supply vacuum has triggered a massive realignment of global trade flows, with Atlantic Basin exports surging by 3.5 mmbbl/d since February to reach hard-hit East of Suez markets, it said.Producers in the US, Brazil, Canada, and Kazakhstan have pushed output to record levels, while a temporary waiver on Russian oil-on-water sanctions has provided marginal relief, IEA added.Despite these efforts, global oil supply is projected to decline by an average of 3.9 mmbbl/d for the full year 2026, as per the report.On the demand side, global oil demand is now forecast to shrink by 420,000 b/d year over year in 2026 -- a downward revision of 1.3 mb/d from pre-war estimates.The second quarter of 2026 is expected to be the most severe, with demand dropping by 2.45 mmbbl/d as the petrochemical and aviation sectors reel from high prices and supply constraints, IEA said.While demand may return to growth by the fourth quarter if a diplomatic resolution allows for a gradual reopening of the Strait in July, analysts warn that supply recovery will likely lag, ensuring continued volatility through the peak summer travel season.