The Iran war oil reserves crisis is accelerating at a pace the world has never seen before, with global stockpiles burning through their emergency buffers at record speed and energy experts warning the worst is still ahead.
Morgan Stanley estimates global oil stockpiles dropped by 4.8 million barrels per day between March 1 and April 25, far exceeding the previous record for any quarterly drawdown in history. The cause is straightforward: the near closure of the Strait of Hormuz, through which roughly 20% of the world’s oil supply normally flows, has removed approximately 14 million barrels per day from global markets since February 28.
In the United States, the picture is alarming. Crude inventories, including the Strategic Petroleum Reserve, have fallen for four consecutive weeks. Gasoline stockpiles are at their lowest seasonal level since 2014. Distillate inventories covering diesel, jet fuel and heating oil hit their lowest point since 2005. US crude oil inventories unexpectedly plunged by 6.2 million barrels in just one week, according to the Energy Information Administration.
Energy analyst Bob Yawger of Mizuho put it bluntly: “We’re draining the tanks at a rapid rate. We’re in a bad place going into summer driving season. The war could end tomorrow and we don’t have enough gasoline to super size the market. We’re not going back to $2.50 a gallon gas anywhere in the US anytime soon.”
The situation is even more dire in Asia. Oil inventories in Japan and India have hit 10 year seasonal lows, down 50% and 10% respectively since the war began. Pakistan has just 20 days of commercial fuel reserves remaining. Indonesia, Vietnam and the Philippines are approaching critical levels. Only China, which has massively electrified its vehicle fleet, remains relatively comfortable.
In Europe, jet fuel stocks are depleting rapidly just as summer vacation season approaches, with some analysts warning they could hit critical levels as soon as June 2026.
The US has released approximately 79.7 million barrels from its Strategic Petroleum Reserve but has promised to release up to 172 million. If the full release is completed, the SPR would fall to its lowest level since 1982. Even that may not be enough. “One thing for certain is there is a global supply crunch coming, and it’s not being fully priced in,” warned energy economist Joe Brusuelas of RSM US.
Experts caution that even when the Strait of Hormuz reopens, recovery will not be immediate. Gulf output and shipping infrastructure will take months to normalize, and governments worldwide will then race to replenish depleted reserves, creating an additional layer of demand that could keep prices elevated well into 2027.