September becomes a critical point! JPMorgan: By then, oil inventories will approach their limits, and the Strait of Hormuz "will reopen no matter what."
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The global oil market is consuming a shrinking buffer.
According to Wind Trading Desk, JPMorgan’s commodities team recently issued an analysis warning about the current global crude oil inventory: On the surface, there are 8.4 billion barrels in global inventory, seemingly ample; but peeling back this number, only about 800 million barrels can actually be mobilized without causing systemic stress.
The key issue is the timeline. JPMorgan estimates that if the Strait of Hormuz remains blocked, OECD commercial inventories will hit their “operational minimum” in September this year—by then, oil product distribution won’t just be “tight,” but will face a real risk of operational paralysis.
At that point, the world may have no other choice—the Strait of Hormuz “will reopen no matter what.”
The illusion of 8.4 billion barrels: Only 800 million truly usable
The numbers themselves don’t tell the story; the structure is the key.
By early 2026, global inventory totals 8.4 billion barrels, with about 6.6 billion stored on land and 1.8 billion afloat at sea (including in-transit cargo and sanctioned Russian/Iranian crude). By category, about 5.2 billion barrels are crude oil, 3.2 billion barrels are refined products.
But these 8.4 billion barrels are not all readily accessible.
JPMorgan commodities analyst Natasha Kaneva notes that a large volume is “locked” in pipeline fill, storage tank minimums, and other operational constraints and cannot be mobilized. The amount that can be extracted without triggering operational stress is only about 800 million barrels.
As of April 23, about 280 million barrels of these 800 million have already been used to buffer the blockade’s impact.
Remaining available buffer: just over 500 million barrels.
How inventories get peeled layer by layer
To understand this crisis, you need to understand the sequence in which inventory is consumed—like peeling an onion, starting from the outside layer, and it hurts more as you go deeper.
First layer: Floating inventories at sea. This is the easiest to use. Cargoes on tankers can quickly change destination with no policy decisions needed. At the start of the year, sea inventories were about 1.8 billion barrels; in the past two months, it has fallen by 140 million barrels, at an average consumption rate of 2.7 million barrels/day. As the last shipments through the Strait of Hormuz arrived by April 20, the consumption rate of this layer is expected to slow.
Second layer: Onshore commercial inventories. Refineries’ storage tanks, port inventories, hubs like Cushing (US), ARA (Europe), Singapore, etc. OECD commercial inventory dropped from 2.8 billion barrels in February to about 2.72 billion now, with April’s consumption speeding to 2.2 million barrels/day.
Third layer: Strategic Petroleum Reserve (SPR). Government-controlled emergency reserves, usually only tapped in severe crises. US, Japan, and South Korea are releasing about 2.5 million barrels/day. Since Japan first released strategic reserves on March 26, OECD strategic reserves have decreased by 61 million barrels.
Final layer: Operational minimum inventory. This is the minimum needed to keep pipelines functioning and refineries running. This is rarely used—once reached, the system starts to break down.
Why “operational minimum” is the true red line
Here lies a key logic.
Running out of inventory does not mean there’s not a drop of oil left in the barrel. The real danger is insufficient flow.
JPMorgan gives an analogy: it’s like blood pressure—the total blood volume may be there, but if circulation system pressure is too low, organs become hypoxic. For the oil system, once working inventory falls below the critical point, pipeline pressure drops, port loading efficiency deteriorates, refineries can’t get enough oil, traders start buying up front-month contracts—the system doesn’t break down because there’s “no oil,” but because “flow is jammed.”
Historical data shows that the OECD refined product inventory (including commercial and strategic reserves) rarely drops below about 35 days of forward demand, equivalent to about 1.6 billion barrels—a proven practical lower limit.
Reports estimate: if the Strait of Hormuz stays blocked and demand destruction levels out at 5.5 million barrels/day, OECD commercial inventory will hit this operational bottom line in September this year.
Demand destruction: Should be a buffer, but is failing
Normally, soaring oil prices automatically suppress demand, slowing inventory depletion—market’s self-adjustment mechanism.
But this time, the mechanism is being artificially weakened.
To prevent social unrest, many governments are subsidizing oil prices, artificially lowering the price impact felt by end consumers. This means demand destruction is less than what would be triggered by market price signals, so inventories are depleting faster than expected.
Data reflects the trend: Global oil demand fell by roughly 2.8 million barrels/day in March, 4.3 million barrels/day in April, and is expected to drop further to 5.5 million barrels/day in May.
But the bank warns, if government subsidies keep suppressing demand destruction, this 5.5 million barrels/day cut may not materialize, and inventories may hit bottom even earlier than September.
September: It will reopen, no matter what
The logic chain points to a single conclusion.
OECD commercial inventories are expected to start approaching operational stress thresholds as soon as June, reaching the practical bottom line in September. By then, the world faces a no-way-back choice: either the Strait of Hormuz reopens, or the energy system enters a full-blown breakdown with unknown consequences.
What does the latter imply? The bank's analyst’s words: “unprecedented energy collapse and global economic depression.”
That’s why analysts believe the Strait of Hormuz will “reopen before September, no matter what”—not because the parties will reach political consensus, but because reality allows no other outcome.
For the market, this timeline means: from now to September, each week of continued blockade compresses the global energy system’s safety margin and adds variables to oil price trends.
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