September is a critical juncture! JPMorgan Chase: By then, crude oil inventories will be close to the limit, and the Strait of Hormuz will "definitely reopen no matter what"

The global oil market is depleting a shrinking cushion. According to the Wind Trading Platform, the Morgan Stanley Commodities Team recently released an analysis warning about the current global oil inventory situation: on the surface, the world has 8.4 billion barrels of inventory, which seems abundant; however, when broken down, only about 800 million barrels can actually be used without causing systemic pressure. More crucial is the timeline. Morgan Stanley estimates that if the blockade in the Strait of Hormuz continues, the Organization for Economic Cooperation and Development (OECD) commercial inventories will reach their "operating minimum" in September this year - at which point the oil circulation system will not just be "tight," but will face a substantial risk of operational failure. At that point, the world may have no choice but to reopen the Strait of Hormuz. The illusion of 8.4 billion barrels: only 800 million barrels can actually be used The numbers themselves do not tell the whole story, the structure is key. As of early 2026, global inventories totaled 8.4 billion barrels. About 6.6 billion barrels are stored on land, while 1.8 billion barrels are floating at sea (including goods in transit and Russian and Iranian oil under sanctions). By category, about 5.2 billion barrels are crude oil, and 3.2 billion barrels are refined products. But not all of these 8.4 billion barrels can be accessed at any time. Morgan Stanley commodities analyst Natasha Kaneva pointed out that a large amount of inventory is "locked" in pipeline fill levels, tank minimum levels, and other operational constraints, making it impossible to access. Only about 800 million barrels can actually be extracted without causing operational pressure. As of April 23, about 280 million barrels of these 800 million barrels have been consumed, used as a buffer against the blockade impact. Remaining available buffer: a little over 500 million barrels. How inventory is peeled back layer by layer To understand this crisis, one must understand the order in which inventory is being depleted - like peeling an onion, starting from the outer layer, the more painful it gets as you go in. Layer one: floating at sea inventory. This is the most easily accessible part. Cargo on oil tankers can quickly change destination without any policy decisions. At the beginning of the year, the sea inventory was about 1.8 billion barrels, and has decreased by 140 million barrels in the past two months, with an average consumption rate of 2.7 million barrels per day. With the last batch of goods passing through the Strait of Hormuz arriving on April 20, the consumption rate of this layer is expected to start slowing down. Layer two: onshore commercial inventory. Refinery tanks, port inventories, Cushing (US), ARA (Europe), Singapore, and other key commercial inventories. OECD commercial inventories have decreased from 2.8 billion barrels in February to about 2.72 billion barrels currently, with a consumption rate in April accelerating to 2.2 million barrels per day. Layer three: strategic petroleum reserves (SPR). Emergency reserves controlled by governments, usually used only in times of severe crisis. The US, Japan, and South Korea are currently releasing reserves at a rate of about 2.5 million barrels per day. Since Japan's first release of strategic reserves on March 26, OECD strategic reserves have decreased by 61 million barrels. The last layer: operating minimum inventory. This is the minimum amount necessary to maintain the normal operation of pipelines and refineries. This portion is almost never used - once reached, the system will start to fail.