BlockBeats report, on May 18, CNBC reported that multiple institutions have warned that global crude oil inventories are declining rapidly, and Europe could face an actual oil shortage by the end of this month, with inventory recovery not expected until December 2027.
Jeff Currie, Co-Chair of the Abaxx Commodity Exchange, said that while the oil market appears stable on the surface, the supply system is under extreme strain, and Europe could face physical shortages at any moment. He warned that once inventories are depleted, oil prices could experience a nonlinear surge.
Currie noted that the current crude oil market is in a transitional phase between the traditional off-season and peak season; however, as Memorial Day in the United States and the UK Spring Bank Holiday approach, demand for diesel, gasoline, and jet fuel will rise rapidly, potentially intensifying supply pressures.
Analysts at Société Générale (SocGen) stated that the current oil market is merely maintaining a "veil of stability," while underlying inventories and logistics systems are actually "extremely fragile."
The report states that since the escalation of U.S.-Iran tensions on February 28, traffic through the Strait of Hormuz—through which approximately one-fifth of global oil and natural gas shipments pass—has remained restricted. Even though the strait resumed navigation in early June, considering the processes of tanker transport, unloading, refining, and distribution, it will take at least 52 days for the global supply chain to fully recover.
SocGen warned that if the reopening of the Strait of Hormuz is further delayed until the end of June, the market could face deeper and more prolonged supply pressures, global inventories may deteriorate further, and oil prices could rise toward $150 per barrel, remaining elevated for the rest of the year.