Global oil inventories are at risk of depletion within three weeks, potentially causing operational stress in markets by mid-June, according to a report by investment bank JP Morgan. Out of the 8.4 billion barrels of global oil inventory, only 0.8 billion barrels are estimated to be realistically available without straining the system.
Approximately 280 million barrels have already been utilized, leaving around 580 million barrels of usable inventories. However, these reserves could be exhausted by early June. The main concern highlighted in the report is not the disappearance of oil supplies but the lack of accessible inventories necessary for the smooth functioning of the system.
The report emphasizes that the failure of the system is not due to oil completely running out but rather the insufficient working volume in the circulation network. Various inventories are tied up in pipeline requirements, minimum tank levels, and other operational necessities, reducing the amount available to the market.
International oil benchmark Brent crude witnessed a 2.30% drop to $107.33 a barrel, while US West Texas Intermediate crude fell by 3.08% to $99.12 a barrel. These price movements were influenced by US President Donald Trump’s announcement of temporarily halting “Project Freedom,” an initiative to escort commercial vessels through the Strait of Hormuz, following progress in negotiations with Iran.
