Reserves that Prevented 'Full-Blown' Oil Shock Running Low, IMF Says
The fund said spare capacity and inventories have fallen sharply, leaving markets less able to absorb another supply hit.
- The International Monetary Fund warned that depleted oil reserves have left economies vulnerable to soaring fuel prices as the US-Iran conflict resumes, with reserves falling to about 1.2 billion barrels by end of May—half pre-conflict levels.
- Before the war began in late February, about 20 per cent of global oil transited the Strait of Hormuz; the conflict created a four million barrel-a-day deficit between March and May supplied almost entirely through reserve drawdowns, pushing prices up more than 10 per cent.
- Alternative producers including the US, Venezuela, Guyana and Russia increased output nearly 2 million barrels daily above 2025 levels, while Asian demand slowed as consumers shifted toward coal and renewables amid higher prices.
- Vivek Dhar, Commonwealth Bank analyst, warned Brent oil could reach $US100/bbl within 10 days if disruptions persist, potentially spiking to $US150/bbl long-term, while Rabobank maintained forecasts of $US80/bbl for July-September and $US78/bbl year-end.
- Global oil inventories have moved closer to a critical 'tipping point,' leaving little margin to absorb sustained supply losses without sharp price spikes, with reserves potentially depleted by early 2027 if disruptions continue at current rates.
21 Articles
21 Articles
Global oil buffers are running low, warns IMF
The International Monetary Fund (IMF) has warned that the global oil market is facing severe risks as crucial shock absorbers are rapidly depleting following the recent conflict in the Middle East. Although the closure of the Strait of Hormuz cut off approximately 20 million barrels of oil and refined products daily, crude prices managed to […]
Renewed fighting between the United States and Iran has left the oil market in far worse shape than at the start of the war. The Strait of Hormuz is almost closed again after the ceasefire broke down, but supplies dampened by previous blackouts are rapidly thinning. Traders warn that the market is entering a more dangerous phase, when another outage will no longer be a substitute for it.
Why haven't oil prices exploded despite the war in the Middle East? The International Monetary Fund provides a response – and warns that this safety net will not last long.
Depleted stockpiles stoke global oil supply anxiety
The renewed fighting between the US and Iran again jeopardizes global oil supplies, after stockpiles were drained earlier in the conflict. “We’ve burned through all of the buffers we had. Everything,” one trader told the Financial Times. Energy markets had some slack to absorb the first shock, but that cushion is “smaller and shrinking further,” International Monetary Fund researchers wrote. The industry is also anxious over the possibility that…
Coverage Details
Bias Distribution
- 50% of the sources lean Left, 50% of the sources lean Right
Factuality
To view factuality data please Upgrade to Premium
