Oil reserves held by the world's largest economies are being drawn down at record rates to replace lost Middle Eastern production, pushing total stocks among Organization for Economic Cooperation and Development members toward their lowest level since at least 2003, the U.S. Energy Information Administration said Tuesday.
The EIA projects that OECD oil inventories will fall to just under 2.3 billion barrels by December. That outlook assumes that marine traffic through the Strait of Hormuz - a critical transit point for regional crude flows - will not return to pre-conflict volumes until early 2027.
In a revision to its prior outlook, the agency said it now anticipates oil shipments through the Strait of Hormuz to resume in the third quarter of 2026. However, the EIA added it does not expect traffic through the strait to increase back to pre-Iran war levels until early 2027.
The agency traced the inventory declines to disruptions at the Strait of Hormuz, which forced Middle Eastern producers to curb output by more than 11 million barrels per day in May compared to pre-war levels. The EIA said some level of Middle East output disruption is likely to persist beyond the agency's forecast period, which extends through the end of 2027.
Those supply losses and the pace of withdrawals from stocks have prompted the EIA to adjust its global demand outlook. The agency now expects global oil demand to decline in 2026, reversing an earlier projection that had anticipated a marginal year-over-year increase.
The EIA's updated assumptions on the timing of restarted shipments through the Strait of Hormuz and the extended timeline for return to pre-conflict traffic underpin its inventory trajectory and demand revision. The agency's forecast reflects an expectation that full normalization of flows will lag the initial resumption of shipments.
Context and implications
Members of the OECD are drawing from both strategic and commercial reserves to fill the gap left by reduced Middle Eastern output. The resulting stock declines to just under 2.3 billion barrels by December mark a significant shift in available buffer capacity for the world's largest consuming economies.
The EIA's decision to lower its 2026 global demand estimate signals changing expectations about consumption patterns in the near term given continued supply constraints and slower return of transit volumes through the Strait of Hormuz.
Methodology note
All projections and statements above are drawn from the U.S. Energy Information Administration's updated forecasts and assumptions regarding production, shipments through the Strait of Hormuz, and the agency's forecast horizon through the end of 2027.