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Global Oil Inventories at Risk of Exhaustion by Mid-June: JP Morgan Report

A JP Morgan report warns that accessible global oil inventories could be exhausted by mid-June, risking operational stress in markets. Of the 8.4 billion barrels total, only 0.8 billion are usable without disrupting supply chains. International oil benchmark Brent crude dropped 2.3% to $107.33 after US President Donald Trump halted Project Freedom. The decision followed progress in negotiations with Iran toward a final agreement.

Key Points: Global Oil Inventories Could Run Low by Mid-June

  • Accessible global oil inventories could be exhausted by mid-June
  • Only 0.8 billion barrels of 8.4 billion total are usable
  • 280 million barrels already drawn down, leaving 580 million
  • Brent crude drops 2.3% to $107.33 after Trump halts Project Freedom
2 min read

Accessible global oil inventories could run low by mid‑June: Report

JP Morgan warns accessible global oil inventories could be exhausted by mid-June, risking operational stress in markets as tensions and disruptions persist.

"The system does not fail because oil completely disappears, it fails because the circulation network no longer has enough working volume. - JP Morgan Report"

New Delhi, May 6

Global oil inventories that can be tapped without disrupting supply chains could be exhausted within three weeks, raising the risk of 'operational stress' in markets by mid‑June, a report has said.

The report from investment bank JP Morgan said that the global oil inventory stood at 8.4 billion barrels of oil in early 2026, but only a small portion is usable without pushing the system into strain in order to keep the circulation network working.

"Of the 8.4 billion barrels, we estimate only 0.8 billion are realistically available without pushing the system into operational stress," it said.

The investment bank said that approximately 280 million barrels have already been drawn down, leaving about 580 million barrels of usable inventories available, but it could be exhausted by early June.

As oil markets remain volatile following tensions in the Middle East and disruptions through the Strait of Hormuz, the report said that the issue facing the market is not the total disappearance of oil supplies, but the lack of accessible inventories to enable smooth functioning of the system.

"The system does not fail because oil completely disappears, it fails because the circulation network no longer has enough working volume," the report said.

Some inventories remain tied up in pipeline requirements, minimum tank levels and other operational requirements, limiting the amount available to the market.

Moreover, international oil benchmark Brent crude dropped by 2.30 per cent to $107.33 a barrel, while US West Texas Intermediate crude declined by 3.08 per cent to $99.12 a barrel.

The latest moves in crude prices were triggered by comments from US President Donald Trump, that the United States would temporarily halt "Project Freedom", a military initiative launched earlier to escort commercial vessels through the Strait of Hormuz.

President Trump said in a social media post that the decision followed progress in negotiations with Iran toward a final agreement.

- IANS

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Reader Comments

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Priya S
I'm not surprised. With the tension in the Middle East and the Strait of Hormuz, it was only a matter of time. But Trump's back-and-forth on Project Freedom makes things worse. India should diversify its oil sources, maybe buy more from Russia or invest in our own exploration.
J
James A
The report says 'operational stress' by mid-June, but markets sometimes overreact. We've seen oil supply scares before and things adjusted. Though I agree, the geopolitical risk is real. Let's hope negotiations with Iran hold.
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Vikram M
It's frustrating that we're so dependent on Middle Eastern oil. India has been talking about strategic storage for years, but we still only have enough for a few weeks. Meanwhile, our common man is left to bear the brunt of petrol prices. Government should seriously accelerate EV adoption!
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Sarah B
Interesting that Trump's comments actually eased oil prices temporarily. But the underlying problem remains - how do we get oil without stressing the system? Maybe it's time for the world to rethink its addiction to oil. India has a huge opportunity with its solar potential.
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Rohit P
I get the report, but why is JP Morgan always fear-mongering? Didn't they predict $200 oil a few years back? Yes, the Strait of Hormuz is a choke point, but countries have contingency plans. India has been building renewable capacity. But still, we need to be prepared.

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