World oil inventories are lowest since 2003 as closure of Strait of Hormuz depletes supplies, report warns | Today’s news
Oil inventories held by the world’s 38 richest countries have fallen to their lowest level since 2003, with global inventories leaking at a record pace as the closure of the Strait of Hormuz cuts off Middle East oil and forces the United States into the role of emergency supplier to global markets, the US Energy Information Administration said on Tuesday.
OECD stocks are at a 23-year low
Inventories in the 38 countries of the Organization for Economic Co-operation and Development, which include the US, Canada, Japan, France, the UK and South Korea, fell to levels not seen since 2003. USEIA data.
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Pumping is accelerating: Global oil inventories are expected to fall by 6.3 million barrels per day in the current quarter, followed by another 7.66 million barrels per day in the third quarter, according to EIA data.
The Hormuz factor
The immediate driver is the ongoing closure of the Strait of Hormuz, through which a significant proportion of the world’s oil exports usually flow.
The strait transported about 20 million barrels per day of oil and oil products in 2025, equivalent to about 25% of global seaborne oil trade and one-fifth of total global consumption.
That flow has since collapsed. Throughput fell by nearly 6 million barrels per day in the first quarter of 2026 to 14.6 million barrels per day, down nearly 30% year-over-year and from 20.7 million barrels per day in the fourth quarter of 2025, according to EIA data.
Before the conflict, three-quarters of Hormuz oil was sent to Asia, with China and India accounting for 44% of total exports through the strait. Alternative routes exist, but they fall far short of closing the gap.
Saudi Arabia’s East-West pipeline has a reported capacity of 7 million barrels per day, while the UAE’s Habshan-Fujairah pipeline can carry up to 1.8 million barrels per day. Taken together, the IEA estimates available alternative export capacity at only 3.5 to 5.5 million barrels per day, a fraction of what the strait used to handle.
The scale of the shortage prompted the IEA to announce a coordinated release of 400 million barrels from member countries’ emergency stocks on 11 March 2026, the largest in the organization’s history.
At the time, member states held more than 1.2 billion barrels in public emergency stocks, along with about 600 million barrels of industrial stocks held under government commitments. LSE
India’s four-day problem
Consultancy firm EY has warned that India’s strategic oil reserves are only enough for 4-5 days of domestic consumption, leaving the country acutely exposed to the supply shocks now roiling global markets. EY said in its May 2026 Economy Watch report that the crisis in West Asia has exposed India’s dependence on imported energy and critical supplies, with global crude averaging $103.9 a barrel in April 2026, the highest level since July 2022.
“Given the West Asian crisis and other adverse economic developments, a substantial reorientation of policies may be required,” the report said.
EY called on India to build “relatively larger stocks of oil and primary commodities where India’s import dependence and vulnerability is high”, including LPG, fertilizers, rare earth materials, essential medicines and critical medical equipment.
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The report also urged faster diversification of energy import sources, acceleration of alternative trade corridors, including the India-Middle East-Europe Economic Corridor, and a broader shift towards green energy and electric vehicles to reduce long-term dependence on imported fossil fuels. “India can rethink its growth strategy,” EY said.
US stocks are at their lowest since 2004
The tension is equally evident in US domestic supply data. Total U.S. crude and oil product inventories fell by 10.6 million barrels in a single week to 1.57 billion barrels, the lowest level since 2004.
Commercial and government crude inventories fell by 15.9 million barrels over the same period, the second-biggest weekly decline on record. Rising exports to Asia and Europe, as buyers look to replace lost Middle Eastern supplies, are driving the rapid drawdown.
The strategic reserve is rapidly being depleted
US strategic oil reserves fell by another 7.9 million barrels last week. Since the start of the Iran war, reserves have fallen by 58 million barrels and now stand at 357 million barrels, the lowest level since January 2024.
US crude oil exports: from 3 million to 13.6 million barrels per day
Before the Iran War, US exports of oil and petroleum products were approximately 3.0 million barrels per day. That figure has since risen to 13.6 million barrels a day, the second-highest reading on record, as global markets focus on US supplies to offset disrupted Middle East oil flows.
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U.S. net exports hit a record 5.8 million barrels per day in April. Officials now expect full-year net exports to average 4.2 million barrels a day, nearly triple the 1.4 million barrels a day recorded the previous year, cementing the U.S. as the primary emergency supplier to world oil markets.
