United States of America

EIA: Oil Stockpiles to Hit 2003 Low Amid Hormuz Crisis

Is the Iran crisis a permanent rupture in global energy markets or a temporary spike worth the trade-off?

Published JUN 10

EIA: Oil Stockpiles to Hit 2003 Low Amid Hormuz Crisis

Story

Above: Vessels sail at Suru Beach in Bandar Abbas along the Strait of Hormuz on June 1. Image credit: Amirhossein Khorgooei/ISNA/AFP/Getty Images

The Facts

OECD oil stockpiles will fall to just under 2.3 billion barrels by December 2026, their lowest levels since at least 2003, according to the U.S. Energy Information Administration's (EIA) Short-Term Energy Outlook published on Tuesday.
U.S. Energy Information Administration
The News International
Quartz
The EIA claimed that an 11.3 million barrels per day decline in Middle East oil output was driving the drawdown, stemming from the de facto closure of the Strait of Hormuz, which the International Energy Agency states handles roughly 25% of global seaborne oil trade.
U.S. Energy Information Administration
IEA
The agency, however, does not expect the strait to reopen until Q3 2026, and pre-conflict levels of production and trade not to return until early 2027, with the EIA reporting shut-ins spanning Kuwait, the UAE, Iran, Iraq, Qatar, Bahrain and Saudi Arabia.
U.S. Energy Information Administration
Subsequently, the EIA projects oil prices to remain elevated throughout the summer, anticipating average Brent crude spot prices around $105 per barrel (/b) in June and July, compared to a futures market settlement of roughly $91.60/b on Tuesday.
U.S. Energy Information Administration
Reuters
As a consequence, the EIA forecasts wholesale diesel and aviation jet fuel prices to rise by more than 60% in 2026 and 40% in 2027, compared to before the conflict. Wholesale gasoline prices, meanwhile, are expected to rise by 50% and by nearly 40% in 2026 and 2027, respectively.
U.S. Energy Information Administration
Once the straits reopen and oil production restarts, the EIA predicts oil prices to fall to an average of $89/b by Q4 2026, and further still to $79/b in 2027 as affected countries fully restore their output and global oil stockpiles begin to replenish.
U.S. Energy Information Administration

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

The Iran crisis is a structural rupture in the global energy markets that could permanently end the era of cheap oil. Emergency stockpiles will struggle to cope with the millions of barrels of lost oil flow, and the production damage across the Middle East may take years to repair. The subsequent ripple effects will hit everything from fertilizer to construction materials for years to come.

The Conversation

Financial Times

Narrative B

The oil price spike from the Iran conflict is temporary and a worthwhile trade-off for eliminating a threat to global security. With the U.S. as the world's largest oil and gas producer and surging output from Venezuela, Guyana and Brazil, the global oil supply is well placed to recover. Once the conflict ends, therefore, prices won't just normalize; they'll drop below pre-war levels.

NBC

Donald Trump on Truth Social