As the Iran war disrupts oil transportation in the Persian Gulf, global oil inventories are depleting at a record pace, with buffer stocks for supply shocks rapidly running out. With the Strait of Hormuz having been in a near-blockade state for almost two months, governments and industries worldwide are facing increasingly limited options to respond to a supply loss shock of over 1 billion barrels. The depletion of inventories means that even after the conflict ends, the market will remain vulnerable to future supply disruptions for an extended period. Morgan Stanley estimated that global oil inventories decreased by approximately 4.8 million barrels per day on average from March 1 to April 25, significantly exceeding the highest quarterly inventory depletion rate ever recorded by the International Energy Agency (IEA). Crude oil accounted for about 60% of the decrease, with refined products making up the remainder.
