The U.S. Energy Information Administration (EIA) warns that oil inventories in major economies are on track to fall to multi-decade lows. In its monthly Short-Term Energy Outlook, the EIA says inventories across Organization for Economic Cooperation and Development (OECD) countries are being drawn down at a record pace, reflecting lost oil output associated with the conflict involving Iran.
Based on the EIA’s current assumptions, total OECD oil inventories are projected to drop to just under 2.3 billion barrels by December. The EIA says this would be the lowest level since it began keeping records in 2003. The forecast depends on expectations that marine traffic through the Strait of Hormuz is unlikely to return to pre-conflict levels until early 2027.
The EIA also links the inventory decline to the need to cover the equivalent of 11 million barrels per day of lost Middle Eastern supply. Both outlets describe the drawdown as a factor that could contribute to higher oil prices in coming months, while noting that developments around the Strait of Hormuz remain relevant to the outlook.
