Daily "Blood Loss" of 4 million barrels! IEA: The Strait of Hormuz "effectively closed", global oil inventories evaporating at the fastest pace in history

The International Energy Agency (IEA) has warned that the global oil stock is depleting at a record pace due to escalating tensions in the Middle East caused by the Iran war, and it is expected to continue to decline in the coming months. Even if the conflict ends next month, the market will still face a "severe supply shortage" before October. Stocks are being depleted at a rate of 400,000 barrels per day In its latest monthly report, the IEA pointed out that in March and April of this year, global observed oil stocks decreased at a rate of about 400,000 barrels per day. This decline is the fastest pace the agency has ever recorded. Since the escalation of the conflict in February, cumulative supply losses have reached 12.8 million barrels per day. In the month of April alone, global supply decreased further by 1.8 million barrels per day. The Strait of Hormuz, which connects the Persian Gulf to the international market, is the most important oil transit route in the world, with daily traffic accounting for one-third of global seaborne oil transport. The IEA stated that the continued conflict has effectively closed the strait, severely restricting the exports of Gulf oil-producing countries such as Saudi Arabia, the UAE, and Iraq. IEA head of oil markets and industry Toril Bosoni said in an interview, "Even if the conflict is resolved, we believe that it will take weeks or even months for the strait to return to normal navigation. The longer the interruption continues and the faster the stocks are consumed, the greater the pressure we will see on prices. Demand faces the biggest impact since the pandemic While supply is under pressure, the demand side is also suffering. The IEA has lowered its global oil consumption forecast for the third consecutive month. The report shows that due to interruptions in refined oil supply and soaring prices, global oil consumption is expected to plummet by 2.45 million barrels per day this quarter, marking the largest quarterly decline since the COVID-19 pandemic in 2020. The report specifically noted, "The petrochemical industry has been hit the hardest, with raw material supplies becoming increasingly tight. Aviation activities are also far below normal levels." Due to the largest supply disruption caused by the conflict, London Brent crude oil futures prices briefly exceeded $126 per barrel last month, reaching a four-year high. The price has since fallen, trading around $106 per barrel on Wednesday, May 13, as diplomatic talks between the US and Iran have yet to make a breakthrough. Over 1 billion barrels of supply evaporated The IEA stated that this round of supply disruption has removed more than 1 billion barrels of oil from the market, completely erasing all expectations of global supply surplus for this year before the war. To mitigate the gap, the IEA coordinated with member countries such as the US, Germany, and Japan in March, committing to release a record 400 million barrels of oil from emergency reserves. These reserves are currently flowing from storage facilities to the market. The report pointed out that the producers of the Atlantic China Welding Consumables, Inc. basin - led by the US, Brazil, Canada, and Venezuela - are increasing supply to the "hard-hit" Asian market, partially easing the supply-demand imbalance. However, the overall market remains in a state of severe shortage. The IEA stated that its annual Oil Market Outlook report for 2027, originally scheduled for release in April, has been delayed to next month due to the war. Goldman Sachs also noted signs of a slight slowdown in the pace of stock depletion recently, as Chinese demand weakened.