Goldman Sachs sees fastest-ever drawdown in oil stockpiles
The global oil market is entering another phase of acute shortage, even though prices remain below wartime peaks. Goldman Sachs said crude and petroleum product inventories are falling at a record pace because of the prolonged war in the Middle East and restricted flows through the Strait of Hormuz.
Highlights
- Goldman Sachs estimates that visible oil inventories fell by a record 8.7 million barrels per day in May.
- WTI crude is trading near $98.89, up 0.64%.
- Brent crude is near $105.59, up 0.54%.
Inventories are falling faster than the market expected
According to Bloomberg, Goldman Sachs said global crude and petroleum product inventories are shrinking at a record pace in May as the war in the Middle East continues. The bank’s analysts, including Yulia Zhestkova Grigsby and Daan Struyven, said visible inventories have been falling by 8.7 million barrels per day since the start of the month, almost twice the average pace recorded since the conflict began.
The main reason is disruption to exports through the Strait of Hormuz. Goldman estimates that expected flows through the route remain extremely low, at about 5% of normal levels. That is tightening the physical market even as some governments draw on strategic reserves to soften the impact on consumers and industry.
Prices rise but stay below the peak
In the latest market snapshot, WTI crude is trading at $98.89 a barrel, up $0.63, or 0.64%. Brent crude is trading at $105.59, up $0.57, or 0.54%. That is well below the wartime peak above $126 for Brent, but still significantly higher than levels seen at the start of the year.
The situation is mixed: prices have stabilized somewhat after sharp swings, but the physical market remains tight. U.S. crude inventories have also been falling, with commercial stockpiles declining for several weeks and strategic reserves being drawn down.
Fuel becomes a separate risk
Goldman said about two-thirds of the May supply drawdown was linked to a decline in oil “on water,” with exports falling faster than imports. The jet fuel market is especially sensitive. According to the bank, European jet fuel imports are about 60% below the 2025 average.
For the global economy, this means more expensive logistics, pressure on air travel and the risk of another inflationary wave. The U.S. travel season could also strengthen demand for gasoline, diesel and aviation fuel. That is why even with Brent near $105-106, the market remains vulnerable: if Hormuz does not return to normal operations, falling inventories will quickly become not only a trading issue, but a problem for consumers.
In an earlier report, we noted that oil prices fall after Trump cancels planned strike on Iran.
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