Global oil inventories could hit critical levels ahead of the peak summer demand period if stock draws continue at their current pace, the head of the International Energy Agency's oil industry and markets division said Toril Bosoni from the S&P Global Energy Middle East Petroleum and Gas Conference in London.
Fuel demand typically peaks in the Northern Hemisphere summer when people drive and fly on holiday.
"We're seeing stock draws continuing into the summer, and with the possibility or the likelihood that we reach critical levels or historical low levels just ahead of the peak summer demand," said Toril Bosoni.
"It could take six to eight months in the best-case scenario to reopen the Strait of Hormuz if an agreement were reached today."
That could make a further IEA-coordinated emergency stock release a possibility, but that is not currently being discussed as around half of the initial 400-MMbbl coordinated release from March is yet to hit the market, she added.
"In any case, emergency stock releases are only a temporary stop-gap measure, they're not going to solve this problem. The scale of the supply losses are so big that the reduction would have to come from the demand side," Bosoni said.
Demand destruction is where high prices force consumers to cut back on buying until supply and demand are more balanced.
What the IEA is seeing
The IEA is seeing higher prices and a weaker economic outlook, translating into lower demand for transport fuels, Bosoni said, adding: "The biggest adjustment factors we have seen to the markets have come from the demand side".
Chinese crude imports were 6 MMbpd lower in May compared with March, which had been a balancing factor in markets and explains weaker prices despite the Hormuz closure.
Brent futures were trading just below $94 per barrel by 1139 GMT on Tuesday, between their pre-war level of around $70 but far from their 2026 high of over $126. LCOc1
Gulf oil producers have lost around 14 MMbpd of supply since the end of February, the IEA said.
Meanwhile, producers in the Americas have boosted supplies, with the United States, Argentina, Brazil and Venezuela all surprising to the upside.
The IEA forecast 2026 supply growth in the Americas at 1.5 MMbpd in its latest monthly oil market report, up by 600,000 bpd from the start of 2026. But those gains only provide a "marginal offset" to the volumes lost to the global market from east of Suez, Bosoni said.
