Oil Stockpile Decline: The U.S. Energy Information Administration (EIA) reports that total oil inventories in OECD member countries will fall to just under 2.3 billion barrels by December 2026, the lowest level recorded since 2003.
Middle East Production Loss: Disruptions at the Strait of Hormuz have forced Middle Eastern producers to cut output by more than 11 million barrels per day in May 2026 relative to pre‑war levels, prompting top consuming nations to draw down inventories at a record pace.
Strait of Hormuz Traffic Outlook: The EIA now assumes oil shipments through the Strait of Hormuz will resume in the third quarter of 2026, but traffic is not expected to return to pre‑Iran‑war volumes until early 2027.
Continued Output Disruption: Some Middle‑East oil output is projected to remain disrupted beyond the EIA’s forecast horizon, which extends through the end of 2027.
Demand Revision: The agency has revised its 2026 global oil demand outlook downward, changing from an earlier marginal increase to an expected decline.
