Iran Conflict Severely Depletes Global Oil Reserves, Raising Supply Concerns
The ongoing conflict involving Iran has led to a rapid depletion of global oil reserves, significantly impacting the world's oil buffer. The Strait of Hormuz, a critical chokepoint for oil transportation, has been nearly closed for two months, causing a substantial reduction in oil supply. According to Morgan Stanley, global oil stockpiles have decreased by approximately 4.8 million barrels per day from March 1 to April 25, surpassing previous records for quarterly drawdowns. This depletion has heightened the risk of extreme price spikes and shortages, leaving governments and industries with limited options to mitigate the impact. The situation is exacerbated by the fact that oil inventories serve as a shock absorber for the global oil system, and not all barrels can be drawn down without reaching operational minimums. 
