Oil Market Runs Down Safety Cushion as Supply Shock Worsens
Key takeaways
- Irina Slav Mon, May 11, 2026 at 4:00 AM GMT+7 5 min read.
- Analysts and energy industry executives are warning that the longer the war in the Middle East continues, the worse the supply situation will become.
- What makes the problem especially grave is that the crisis hit at a time when refiners normally build inventories ahead of peak demand season in the northern hemisphere.
Irina Slav Mon, May 11, 2026 at 4:00 AM GMT+7 5 min read. The last tankers out of the Persian Gulf are reaching their destinations. Strategic reserves are being drained to make up for lost Middle East supply and keep a lid on prices. But there is a problem with this: an emergency response to a crisis is by definition unsustainable.
Analysts and energy industry executives are warning that the longer the war in the Middle East continues, the worse the supply situation will become. Global oil inventories are falling at a record pace, media reported earlier this week, with one Kpler analyst noting that inventory support remains finite and cannot sustainably offset prolonged disruptions.
What makes the problem especially grave is that the crisis hit at a time when refiners normally build inventories ahead of peak demand season in the northern hemisphere. Summer is peak driving season. It is also active farming season, and air travel is at a peak, as well – normally. This summer is likely to be different as the price spike resulting from the Middle East crisis will undoubtedly hurt demand, and not only in Asia, where the shortages are already being felt.