Goldman Sachs: Global crude oil inventories saw a record daily decline in May, reaching 8.7 million barrels.

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Against the backdrop of the ongoing Middle East war disrupting global energy supplies, global crude oil inventories are being depleted at the fastest rate in history, drastically narrowing the market buffer.

According to a research report released by Goldman Sachs on May 20, since May, the average daily decrease in global visible crude oil and refined products inventories has reached 8.7 million barrels, a historical record and almost double the average consumption rate since the conflict broke out. Analysts Yulia Zhestkova Grigsby and Daan Struyven pointed out that the Strait of Hormuz is currently under a dual blockade by Iran and the United States, with transiting crude oil exports at only 5% of normal levels, "the physical market continues to tighten."

Fatih Birol, director of the International Energy Agency (IEA), also issued a warning last week, stating that commercial crude oil inventories are falling at an accelerating pace. The IEA estimates that even if the conflict ends soon, the global market will remain in a state of "severe supply shortage" until October.

Brent crude oil futures traded near $105 per barrel on Thursday, up more than 70% year-to-date, but still well below the wartime peak of over $126 per barrel.

The Blockade of Hormuz is the Core Driving Force of Accelerated Inventory Decline

Goldman Sachs analysts stated that about two-thirds of May's inventory decline stems from a reduction in "oil on water"—as export declines have far outpaced import shrinkage. The root cause of this is the dual blockade of the Strait of Hormuz, causing transiting crude oil exports to fall to just 5% of normal levels.

Since March, the global average daily consumption of inventories has reached 4.6 million barrels, but thanks to substantial "buffer inventories" accumulated in the nine months before the war, overall inventory levels currently remain roughly the same as the same period last year. Goldman Sachs analysts believe this buffer is being rapidly depleted, and the market's vulnerability will become increasingly apparent over time.

The demand side is also under pressure. The Goldman Sachs report notes that the trend of declining imports has "spread from Asia to Europe," with jet fuel flows into Europe 60% lower than the 2025 average level.

U.S. Inventories Approach Critical Levels, Oil Prices Remain Under Pressure at High Levels

In the U.S., nationwide crude oil inventories (including the Strategic Petroleum Reserve) saw a significant decline last week. Official data show that, as record-high exports begin to erode domestic inventories, stockpiles at the Cushing, Oklahoma delivery hub continue to fall, gradually approaching the so-called "tank bottoms".

Goldman Sachs analysts also pointed out that the U.S. summer travel season is set to begin this weekend, which will provide a "tailwind" for demand for gasoline, diesel, and jet fuel.

Brent crude oil futures are currently around $106 per barrel, up more than 70% so far this year, but still significantly below the wartime peak of over $126. Uncertainty over the course of the conflict and the restoration of supply remain key factors restraining further increases in oil prices.

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