Institution: Iran's war is depleting global oil buffer inventories at an unprecedented rate

ME News Report, May 9 (UTC+8), as the Iran conflict has led to disruptions in Persian Gulf oil transportation, global oil inventories are being depleted at a record-breaking rate, eroding the buffer stocks originally meant to withstand supply shocks. The rapid depletion of inventories means that the risk of more extreme price spikes and supply shortages is becoming increasingly imminent. As the Strait of Hormuz approaches closure for two months, governments and industries have fewer options to cope with the impact of over 1 billion barrels of supply loss. The sharp consumption of inventories also indicates that even after the conflict ends, the market will remain vulnerable to future supply disruptions for a longer period. Morgan Stanley estimates that between March 1 and April 25, global oil inventories decreased by approximately 4.8 million barrels per day on average, far exceeding the previous quarterly inventory decline peak compiled by the International Energy Agency. Nearly 60% of the reduction was in crude oil, with the rest in refined products. The key point is that the oil system also needs to set a minimum inventory level. Natasha Kaneva, head of global commodities research at J.P. Morgan, stated that this means the safety stock that cannot be touched has already been reached before inventories truly hit bottom. (Jin10) (Source: ODAILY)