IEA Warns Oil Stocks Could Hit Crisis Levels by June as Hormuz Closure Drains Supply
Updated
Updated · The Guardian · May 24
IEA Warns Oil Stocks Could Hit Crisis Levels by June as Hormuz Closure Drains Supply
3 articles · Updated · The Guardian · May 24
Record inventory draws have pushed global oil markets toward a tipping point, with the IEA warning stocks are depleting at an unprecedented pace after Iran shut the Strait of Hormuz.
End-June is the key risk window: Capital Economics said OECD inventories could reach critically low levels by then, while JPMorgan warned of operational stress as early as next month.
Brent could jump to $130-$140 a barrel if the strait stays effectively closed, triggering demand destruction as drivers, airlines, refiners and industry cut consumption to match constrained supply.
About $40 billion in extra gasoline costs — roughly $300 per US household — has already hit consumers since the war began, even as emergency reserves, pipeline rerouting and weaker Chinese imports softened the initial shock.
The IIF said disruption is now spreading beyond crude into LNG, fertilisers, shipping and industrial inputs, suggesting even a peace deal may bring only partial normalisation and leave energy markets tighter.
With oil reserves depleting, what happens to the global economy if the US-Iran peace talks completely fail?
Could the Hormuz blockade's impact on fertilizer escalate into a widespread global food crisis this year?
The Largest Oil Supply Disruption Ever: How the 2026 Strait of Hormuz Closure Reshaped Global Energy and Economy
Overview
In May 2026, the closure of the Strait of Hormuz triggered an unprecedented supply shock, immediately disrupting global oil and gas markets. As this critical chokepoint ceased regular operations, severe and immediate consequences for global energy security followed. Readily available oil inventories were quickly depleted, with only about 800 million barrels truly accessible without straining the supply chain. Most of the billions of barrels in storage are essential working volume, making it difficult to draw down stocks to cover the deficit. As a result, the world faced severe limitations in mitigating the supply crisis, leading to ongoing market instability.