Oil inventories across the world’s largest economies are approaching their lowest levels since at least 2003, as major consuming nations draw down stocks at a record pace to offset the loss of more than 11 million barrels per day of Middle Eastern production caused by the war with Iran, according to the U.S. Energy Information Administration (EIA).
Total oil inventories held by member countries of the Organization for Economic Cooperation and Development (OECD) are projected to fall to just under 2.3 billion barrels by December, the EIA said. The forecast assumes that shipping through the Strait of Hormuz will not return to pre-conflict levels until early 2027.
The EIA said it now expects oil shipments through the Strait of Hormuz to begin recovering in the third quarter of 2026. However, the agency does not anticipate traffic through the waterway returning to pre-war levels before early 2027.
Disruptions in the Strait of Hormuz forced Middle Eastern producers to cut output by more than 11 million barrels per day in May compared with pre-war levels, according to the EIA.
The agency expects part of the region’s production to remain offline beyond its forecast period, which extends through the end of 2027.
The EIA now forecasts a decline in global oil demand in 2026, reversing an earlier outlook that had projected modest growth.
