Goldman Sachs reported Monday that global crude and product inventories are closing in on an eight-year low, flagging the pace of stock depletion as a growing concern while supplies moving through the Strait of Hormuz remain constrained.
The bank estimated total global oil stocks at about 101 days of global demand, and said those inventories could decline further to 98 days by the end of May. While Goldman judged it unlikely that total global stocks will fall to minimum operational levels this summer, it cautioned that the speed of the drawdown and localized supply losses across certain regions and product types are worrying.
Markets reacted sharply to a recent escalation in the Middle East: oil prices rose roughly 6% on Monday after Iran struck several vessels in the Strait of Hormuz and set a United Arab Emirates oil port on fire. According to the account cited by the bank, this rise in hostilities followed an effort by U.S. President Donald Trump to employ the U.S. Navy to reopen shipping lanes, marking the most significant escalation since a ceasefire had been in place four weeks earlier.
Goldman also examined refined products inventories and reported a notable drawdown. The bank estimated that global commercial refined-product stocks have contracted from around 50 days of demand prior to the U.S.-Israeli war on Iran to approximately 45 days of demand at present. The bank warned that easily accessible buffers of refined products are approaching very low levels, raising concerns about near-term availability of key finished fuels.
In sum, while total global crude and product inventories may not breach operational minimums this summer, the combination of rapidly shrinking stocks, regional disruptions to flows through the Strait of Hormuz, and reduced refined-product cushions has prompted Goldman Sachs to sound an elevated note of caution for market participants monitoring supply dynamics.
Summary
Goldman Sachs says global oil inventories are nearing an eight-year low as constrained flows through the Strait of Hormuz and recent regional incidents drive rapid stock draws. Total stocks are estimated at 101 days of demand and could fall to 98 days by the end of May, while commercial refined-product buffers have dropped from about 50 days to 45 days of demand.