Conflict involving Iran is disrupting oil flows through the Persian Gulf, pushing global crude inventory drawdowns to levels not seen before. Morgan Stanley estimates the world burned through reserves at roughly 4.8 million barrels per day between March 1 and April 25. The pace of depletion signals that supply is falling dangerously short of demand with no immediate relief in sight.
Rapidly shrinking oil inventories are a textbook setup for higher crude prices, which flows directly into inflation — raising costs for airlines, shippers, manufacturers, and consumers. Energy stocks may benefit short-term, but a sustained oil shock historically pressures the broader market by squeezing corporate margins and consumer spending. Bond investors should watch closely too: a new inflation spike could delay or reverse central bank rate cuts.
Weekly: U.S. EIA Crude Oil Inventory Report (every Wednesday). May 2025: OPEC+ scheduled meeting to review production quotas. Ongoing: Persian Gulf shipping lane updates and any ceasefire or escalation signals from the Iran conflict.
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