Global observed crude levels are at record low levels. Implications are ominous.
Global Crude Inventory Chart Notes
Data is from JODI (through March 2026)
April is based on the May IEA Oil Market Report
May is preliminary estimate based on continued aggressive draw pace and industry reports (Exxon, etc.)
The JODI data contains 119 countries, some minor countries not reporting.
I downloaded the data, converted to Excel format and totaled the inventory reports by month to produce the above chart.
Oil Market Report
Please consider the IEA Oil Market Report for May 2026.
More than ten weeks after the war in the Middle East began, mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace. Benchmark oil prices have posted wild swings in response to conflicting signals on whether the United States and Iran will soon reach a deal to end the conflict, with North Sea Dated plunging from a high of $144/bbl to below $100/bbl before rebounding again. At the time of writing, the two countries remained at loggerheads over an accord to reopen the Strait and end the war, with North Sea Dated around $110/bbl.
With Hormuz tanker traffic still restricted, cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 mb/d of oil now shut in, an unprecedented supply shock. The current supply-demand gap is significantly smaller, however, as the market was already in surplus heading into the crisis while producers and consumers alike are responding to market signals.
While demand may swing back to growth towards the end of the year if a deal to end the war is agreed that allows flows through the Strait of Hormuz to gradually resume from 3Q26, as is assumed in this Report, supply will likely be slower to recover. As a result, the oil market remains in deficit until the final quarter of the year. With global oil inventories already drawing at a record clip, further price volatility appears likely ahead of the peak summer demand period.
Key Points
Global oil supply declined by a further 1.8 mb/d in April to 95.1 mb/d, taking total losses since February to 12.8 mb/d. Output from Gulf countries affected by the closure of the Strait of Hormuz was 14.4 mb/d below pre-war levels. Higher production and exports from the Atlantic Basin provide some relief. Assuming flows through the Strait gradually resume from June, global oil supply is projected to decline by 3.9 mb/d on average in 2026, to 102.2 mb/d.
Refinery crude throughputs are forecast to plunge by 4.5 mb/d in 2Q26 to 78.7 mb/d, and by 1.6 mb/d to 82.3 mb/d for 2026 as a whole, as operators contend with infrastructure damage, export restrictions and lower feedstock availability. Refining margins remain at historically high levels, supported by record middle distillate cracks. Refiners are adapting to the crisis, with new trade flows emerging to compensate for lost Gulf product exports.
Global observed oil inventories drew by 129 mb in March and by a further 117 mb in April, according to preliminary data. Continued disruptions to seaborne trade through the Strait of Hormuz saw on-land stocks drop by 170 mb (-5.7 mb/d) in April, while oil on water rebounded by 53 mb. OECD countries’ on-land stocks plummeted by 146 mb (-4.9 mb/d) while visible non-OECD stocks fell by 24
US Strategic Oil Reserves Weekly
US Strategic Oil Reserves Monthly
Data for the above charts is from the US Energy Information Agency.
The monthly preliminary estimates are from the EIA weekly numbers.
US weekly drawdowns are steep but the US started from a better point.
The Only Real Winner
Exxon CEO
“Commercial inventories of crude oil, of liquids, think petroleum, gasoline, diesel, jet fuel, they’ve all run down… We’re approaching unheard of inventory levels. I mean, really, really low levels.
You can debate whether that’s going to hit those really low levels in two weeks or three weeks. Once you get to that point, then you’ll see price shoot up. I mean, I think dated Brent, most people, well, a model would say dated Brent will shoot up. Once you get to that really low inventory level, up to $150, $160.
The models would tell you that. And then what happens is when the price gets to a certain level, demand destruction brings it back into balance. Prices go so high, it becomes unaffordable. And that’s what happens. And so we’re at that level right now.
And I think crude being in this sort of $90 to $110 for the last whatever it is, six weeks, has really been mitigated by running down inventories. It can’t last forever.“
Question of the Day
Does anyone believe Iran does not understand this?
Time is on Iran’s side here.
Iran was supposed to fold in three days, then it was three weeks. Now, no one is sure what Iran’s storage capability even is.
Amusingly, we are discussing a time frame of 2.5 years.
But waiting Iran out is not an option because Iran has chosen to wait the US out.
Not only does Iran have a much higher tolerance for pain, oil inventories and drawdowns are at critical levels.
More Political Desperation May 31, 2026
Truth Social: Iran really wants to make a deal, and it will be a good one for the U.S.A. and those that are with us. But don’t the Dumocrats, and various seemingly unpatriotic Republicans, understand that it is MUCH tougher for me to properly do my job and negotiate, when political hacks keep negatively “chirping,” at levels never seen before, over and over again, that I should move faster, or move slower, or go to war, or not go to war, or whatever. Just sit back and relax, it will all work out well in the end – It always does! President DJT
May 31, 2026, 11:02 PM
Trump is now blaming the “Dumocrats” for the stupid war that he started. It’s obvious to the world that he is the one desperate for a deal. Yet …
Frustrated Trump Ups Terms for a Deal with Iran
Yesterday, I commented Frustrated Trump Ups Terms for a Deal with Iran. What’s Going On?
Trump still has the same three options he has had since the ceasefire started on April 7 2026.
Military Escalation
Wait Iran Out
Agree to a Deal Acceptable to Iran
Netanyahu and warmongers like Ted Cruz and Lindsey Graham want trump to escalate, but it is Iran that holds escalation cards.
Iran has already proven it is willing to go after the regions desalinization plants. A big successful strike on Saudi Arabia would mean evacuation of the entire country.
Agree to a Deal Acceptable to Iran
When you throw away every option that doesn’t work, you are left with options that will work.
That is option three, no matter how distasteful.
It’s all about leverage. And Trump has none.
Based on the Exxon comments, Trump has about 2-3 weeks to figure this out before oil starts blasting higher.
That’s why I am convinced there will be a deal, one that humiliates Trump.
For more on the likely terms of a deal, please see Hello. We Are Again Discussing the Terms of Trump’s Surrender to Iran
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