The world's oil stocks are depleting at an alarming rate due to ongoing turmoil in the Middle East, according to the International Energy Agency (IEA). Fears of shortages are intensifying as the northern hemisphere's summer travel season approaches, with airlines warning of potential jet fuel scarcity within weeks if supply disruptions persist.
IEA Director's Warning
Fatih Birol, the IEA's executive director, told journalists in Paris on Monday that commercial inventories are declining rapidly. 'The commercial inventories are declining... I think it's depleting very fast now,' he said ahead of a G7 finance ministers meeting. Birol cautioned that while there are still several weeks of supply left, these reserves are not endless and are shrinking quickly.
Impact of Strait of Hormuz Disruptions
Iran has effectively halted tanker traffic through the Strait of Hormuz in retaliation for US and Israeli strikes launched in late February, choking off oil and gas flows and sending prices soaring. The IEA reported this month that countries are tapping into oil inventories and strategic reserves at a 'record pace' as diplomatic efforts to end the conflict falter.
US Threats and Fragile Truce
US President Donald Trump threatened on Sunday that 'the clock is ticking' and 'there won't be anything left' of Iran if no peace deal is reached, amid a fragile truce. The Comoros-flagged Onyx 2 was seen anchored on May 16, 2026, in the Strait of Hormuz near Larak Island, Iran.
Emergency Stock Releases
The IEA has coordinated the release of 426 million barrels from emergency stocks by its 32 member countries, with around 164 million barrels already drawn. Birol's warning came as Ryanair Group Chief Executive Michael O'Leary said Europe's jet fuel supply was in 'relatively good' condition despite uncertainty over the Strait of Hormuz reopening.
Ryanair's Position
Ryanair reported a 4% rise in passenger numbers to 208.4 million in the financial year ending March 2026, with revenue increasing 11% to £15.5 billion. O'Leary noted that the Middle East conflict has created economic uncertainty and restrictions in jet fuel supply after commercial flows through the Strait of Hormuz nearly halted. 'Europe's jet fuel supply is relatively good, with significant amounts of fuel sourced from West Africa, the Americas and Norway,' O'Leary said. Global spot prices for jet fuel have risen above £112 per barrel and are expected to remain above pre-conflict levels for several months. Ryanair has hedged 80% of its jet fuel supply for the 2027 financial year at £500 per ton.
Analyst Warnings
JP Morgan's commodity analysts warned that by next month, commercial oil inventories in the developed world could 'approach operational stress levels', making supply losses less manageable. 'Our conclusion is that one way or another the strait reopens in June,' JP Morgan's Natasha Kaneva said, adding that only an end to the war would avert a shortage scenario. If not, 'the next phase of this shock may look less like a traditional crude spike and more like a refining and end-user fuel crisis.' Regions heavily dependent on Gulf supply, especially Europe, are among the most vulnerable.
Iran's New Authority
Iran's top security body announced on Monday the formation of a new body to manage the Strait of Hormuz. The Supreme National Security Council shared a post on its official X account for the Persian Gulf Strait Authority, promising 'real-time updates on the #Hormuz_Strait operations and latest developments.' The official account of the Revolutionary Guards' navy also shared the post.
Trump's threats came as the truce with Iran came under further strain due to drone attacks on US allies in the Gulf.
