Global Oil Inventories Drop Amid Strait of Hormuz Closure

Global oil inventories dropped by 400 million to 600 million barrels between early March and July 2026 following the closure of the Strait of Hormuz by Iran. The depletion occurred after a memorandum of understanding between the United States and Iran collapsed. The U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1983, while crude stocks at the Cushing hub reached a 10-year low.

Donald Trump warned on June 17 that reserves could be exhausted within four weeks. Some investors caution that stocks are nearing tank bottoms, the minimum level necessary for refinery operations. To stabilize the market, members of the International Energy Agency have released approximately 290 million barrels of a planned 400 million.

The crisis is partially offset by strategic stocks in Asia, including over 1,400 million barrels held by China and additional reserves in Japan and South Korea. Current market stability depends on increased production in the Americas, clandestine tankers, and bypass pipelines.