EIA warns of low oil stockpiles

The United States — Energy Information Administration has warned that oil stockpiles in OECD countries are heading towards their lowest levels since 2003, projected to fall below 2.3 billion barrels by December. This rapid drawdown is attributed to 11 million barrels a day of lost Middle Eastern output due to the 'Iran war' and the assumption that marine traffic through the Strait of Hormuz will not return to pre-conflict levels until early 2027. The agency forecasts Brent Crude prices to average around $105 a barrel in June and July, significantly higher than recent futures prices. Furthermore, global oil demand is expected to shrink by 1.1 million bpd this year, a reversal from earlier forecasts, due to high prices, reduced fuel availability, and conservation initiatives. Reports of a potential deal between the United States and Iran to reopen the Strait of Hormuz have not yet materialized, keeping oil production in the region shut-in. Executives from ExxonMobil and Chevron Corporation have also voiced concerns about record-low inventory levels and potential price spikes.