IEA Warning: Record Global Oil Inventory Decline, Oil Prices May Surge Again This Summer

The global oil buffer is quickly narrowing.

The International Energy Agency (IEA) released its monthly report on Wednesday, issuing the most severe supply warning to date: global crude oil and refined product inventories fell by nearly 4 million barrels per day in April, equivalent to the combined consumption of the UK and Germany. Since the outbreak of war in Iran, global oil inventories have cumulatively declined by nearly 250 million barrels, and if oil stranded in the Gulf due to the near-blockade of the Strait of Hormuz is excluded, the drop would be even steeper.

"The world is consuming oil inventories at a record pace, and importing countries are facing unprecedented disruptions to Middle Eastern supplies," the IEA wrote in the report, "Under persistent turmoil, buffer stocks are rapidly tightening, which may herald a new round of soaring oil prices in the future."

The European aviation fuel situation is the most urgent

The Strait of Hormuz carries about one-fifth of the world's oil flow and has been nearly closed for more than 10 weeks, causing the largest oil supply shock in history. Among all the stressed products, the situation for European aviation fuel is the most critical. The Middle East has always been a major source of European aviation fuel, with a supply share of about 60% in 2025. In April, the net import volume of European aviation fuel decreased by nearly 100,000 barrels per day year-on-year, and the stock of the key hub of Amsterdam-Rotterdam-Antwerp (ARA) has broken through a five-year low.

The demand side is also under pressure. Europe's oil consumption decline this year is expected to reach 140,000 barrels per day, the largest scale of demand contraction since the outbreak of the Russo-Ukrainian conflict, and the forecast is based on the premise that the Iran War will end in early June; if the conflict continues, the decline will further expand. Asia is also significantly impacted, with consumption in many countries showing a noticeable decline.

The alternative supply in North America has somewhat eased the pressure. U.S. diesel exports increased by 430,000 barrels per day from the same period last year, with eighty percent flowing to Europe.

The IEA lowers demand forecasts, while OPEC production continues to contract

The IEA lowered its global oil demand forecast for 2026 to 104 million barrels per day, 300,000 barrels per day less than last month; the 2025 demand forecast was slightly raised to 104.4 million barrels per day. According to Bloomberg data, demand in 2026 is expected to decrease by about 420,000 barrels per day compared to 2025, with a year-on-year decline of about 0.4%.

On the supply side, the IEA lowered its forecast for non-OPEC production in 2026 to 72.7 million barrels per day. OPEC's crude oil production in April decreased by 630,000 barrels per day month-on-month to 20.18 million barrels per day. The IEA concurrently raised its 2026 OPEC crude oil demand to 26.6 million barrels per day, showing that against the backdrop of constrained non-OPEC supplies, the market's reliance on OPEC production capacity is increasing.

If the situation in the Strait of Hormuz cannot be substantially improved in the short term, the risk of certain fuel inventories falling to a critical level this summer will continue to rise, and consumers may face the prospect of competing for increasingly scarce supplies.