Goldman Sachs: Global Oil Inventories Decline by a Record 8.7 Million Barrels a Day in May

The reduction in supply caused by conflicts in the Middle East led to an unprecedented decline in global crude oil and refined product inventories in May.

Goldman Sachs analysts Yulia Zhestkova Grigsby and Daan Struyven pointed out in a report that global visible inventories have decreased by 8.7 million barrels per day since May, almost twice the average consumption rate since the conflict erupted. Affected by the dual blockade of the United States and Iran, the oil export volume in the Strait of Hormuz is currently only 5% of the normal level, leading to a continuous tightening of physical market supply.

This widespread supply shock disrupted market balance, forcing governments of various countries to coordinate the release of strategic reserves to stabilize prices. The Executive Director of the International Energy Agency, Fatih Birol, warned that even if the Middle East conflict ends in the short term, the global crude oil market will continue to be in a state of supply shortage until at least October of this year.

From a data structure perspective, two-thirds of the inventory reduction in May was driven by a decline in seaborne en route inventories, and this import decline is spreading from Asia to Europe, with European aviation fuel imports already 60% lower than the average level of 2025. However, thanks to the large buffer inventories accumulated over nine months before the conflict, the current total global inventory remains essentially flat year-on-year.

As the world's largest crude oil importer, China has seen a 22% decrease in domestic fuel sales last month due to a slowdown in economic activity. Domestic refineries have insufficient appetite for crude purchases, leading to a significant drop in imports. In terms of price trends, Brent crude futures prices are currently hovering around $106 per barrel, up more than 70% year-to-date, but still below the peak of over $126 during the conflict period.