IEA warns of further ‘price spikes’ as oil inventories plunge at record pace

Global oil inventories are being depleted at a record pace, accentuating the risk of further price rises as disruption from the Iran war continues, the International Energy Agency warned on Wednesday.

Stockpiles of crude oil and refined fuel fell by almost 4mn barrels a day in April — the equivalent of more than the UK and Germany’s consumption combined — threatening to erode the buffers countries rely on to withstand supply shocks.

“The world is drawing oil inventories at a record pace as importing countries confront unprecedented disruptions to Middle Eastern supplies,” the IEA said in its closely watched monthly report.

“Rapidly shrinking buffers amid continued disruptions may herald future price spikes ahead.”

The warning from the IEA will add to concerns that stockpiles of some fuels could reach critically low levels in the months ahead, forcing consumers to compete for dwindling supplies.

The IEA said global oil stocks had plummeted by almost 250mn barrels since the start of the war, “with much steeper losses” if oil trapped in the Gulf is excluded from its calculations.

The IEA said supply losses from the Gulf were being offset to a degree by lower consumption, including in developed economies.

Europe is set to cut consumption this year on a scale last seen following Russia’s 2022 invasion of Ukraine, with the IEA forecasting a decline of 140,000 barrels a day, about 1 per cent of last year’s consumption.

Its forecast is based on an assumption that the Iran war will end by early June, the IEA said, with further cuts needed if the conflict continues for longer.

About a fifth of the world’s oil usually passes through the Strait of Hormuz. Reduced flows had caused “the largest supply disruption in history”, the IEA said. Consumption had fallen especially strongly in some Asian countries, which receive most of the Middle East’s oil.

Supplies of jet fuel in Europe had come under particular pressure, it said. The Middle East supplied about 60 per cent of Europe’s jet fuel in 2025.

Net imports of jet fuel to Europe fell by nearly 100,000 barrels a day in April against last year, dragging inventories in the crucial Amsterdam–Rotterdam–Antwerp hub below five-year lows, the IEA said.

The impact of falling Middle East supplies had been offset to a degree by products sourced from North America, particularly the US, which increased its diesel exports by 430,000 barrels a day over the past year and directed 80 per cent of those shipments to Europe, the IEA said.

Even if shipping through the Strait of Hormuz reopens, it will take at least two or three months to normalise trade before Middle Eastern producers can start producing as usual, the IEA said. Output from Gulf countries affected by the closure of the Strait of Hormuz was 14.4mn barrels a day below pre-war levels in April.

The agency is carrying out the largest release of its strategic oil reserves in history to offset the impact of the Middle East conflict.

As of May 8, about 164mn barrels of oil had been released by governments and industry as part of the IEA’s 400mn barrel emergency stock release programme in response to the war. The pace of government stock releases picked up considerably in the second half of April, the IEA said.