Economy

Global oil reserves are declining at a record pace: experts are sounding the alarm

Due to the war between the U.S. and Israel against Iran, global oil reserves fell by a record 200 million barrels in April. This was reported by the British newspaper Financial Times, citing data from analysts at S&P Global Energy and Goldman Sachs, according to "Komersant Ukrainian".

“According to S&P estimates, oil volumes fell by 6.6 million barrels per day last month, despite a decline in demand. It plummeted by 5 million barrels per day—the second-largest drop in recorded history. Oil demand has only fallen more sharply during the coronavirus pandemic,” the publication writes.

Goldman Sachs analysts agree with this assessment. They note that global oil inventories are approaching their lowest level in the past eight years. In Northern Europe, according to Argus, jet fuel inventories fell to a six-year low in April.

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And although the main impact has so far been felt primarily by Asian countries, gasoline stocks in the U.S. could reach historically low levels during the peak summer vacation season, notes the Financial Times.

Expert: Oil price increases are still ahead

Due to the war in the Middle East and the blockade of the Strait of Hormuz, the oil market has already been deprived of 1 billion barrels of oil. Traders warn that global reserves are approaching a critical threshold, which could be reached in just a few weeks, writes the Financial Times.

“These are massive scale, far exceeding the usual range,” the publication quotes Jim Burkhard, head of oil market research at S&P Global Energy, as saying.

According to him, the market has not yet reacted to the record pace of inventory drawdowns, so oil price increases are still ahead.

As the Financial Times explains, total global oil reserves are estimated at approximately 4 billion barrels. However, most of this volume is tied up in day-to-day operations necessary to keep refineries and pipelines running.

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