Total losses in crude oil and condensate supply in the Middle East reached 782 million barrels on May 8, according to Kpler. The upward trend of recent weeks is so rapid that this number is expected to break the 1 billion barrel mark by the end of the month.
Although daily production outages have recently stabilized around 12.5 million barrels, disruptions have intensified over the past two weeks. At the center is Iran, where the US embargo drastically limits the country’s export capabilities, forcing Tehran to immediately reduce its domestic activities.
To avoid the closure of oil wells, Iran is using the remaining tankers in the Persian Gulf as floating storage spaces. However, available capacity is being depleted rapidly, foreshadowing a further drop in production in the coming weeks. At the same time, onshore inventories continue to rise, reaching 66 million barrels on May 7, an increase of 6 million barrels from the end of April.
Although the baseline scenario predicts a gradual reopening of the Strait of Hormuz by the end of the month, the losses have already overturned the global balance. Before the war, estimates for March and April showed large surpluses. Ultimately, despite the unprecedented scale of the disruptions, the market recorded a controlled deficit of around 2 million barrels per day. The situation would have been much worse if reduced refinery activity (mainly in Asia), combined with a broader contraction in demand, had not partially offset the massive supply shock.
Source: Kpler
