Global oil stockpiles are shrinking at the fastest pace on record this month as the Middle East war continues to choke supplies and tighten energy markets, according to a new note from Goldman Sachs as cited by Bloomberg .
The Wall Street bank said visible crude and fuel inventories have fallen by 8.7 million barrels a day so far in May, nearly double the average pace seen since the conflict began. Analysts Yulia Zhestkova Grigsby and Daan Struyven noted the sharp drawdown reflects a market still struggling with severe supply disruptions tied to the conflict around the Strait of Hormuz.
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“Physical markets continue to tighten,” the Goldman analysts wrote, estimating oil exports through Hormuz remain at just 5% of normal levels because of what they described as a double blockade involving both Iran and the US.
Brent crude was trading near $106 a barrel on Thursday. Prices are more than 70% higher this year, though still below the war-era peak above $126.
Draining tanks
The report paints a picture of a global oil system rapidly consuming emergency buffers built up before the conflict erupted. According to Bloomberg , governments have already coordinated strategic reserve releases in an attempt to cool prices and stabilise supply.
Goldman said about two-thirds of May’s inventory declines came from a drop in “oil on water,” meaning fewer cargoes were moving globally as exports weakened faster than imports. The bank also said weaker imports were no longer limited to Asia and had begun spreading into Europe.
Jet fuel imports into Europe were running about 60% below 2025 averages, the analysts said.
The warning comes days after International Energy Agency Executive Director Fatih Birol said commercial oil inventories were falling at an accelerated pace. The IEA has also estimated the market could remain “severely undersupplied” until October even if the conflict ends soon.
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China slowdown, US squeeze
Goldman said China, the world’s biggest crude importer, was showing “a lack of appetite” for oil as refinery demand softened. Imports have fallen sharply and domestic fuel sales dropped 22% last month, partly because of weaker economic activity, the bank said, citing its economists.
In the US, crude inventories — including the Strategic Petroleum Reserve — fell by a record 17.8 million barrels last week, according to official data cited by Bloomberg . Stockpiles at the key Cushing, Oklahoma hub are also edging closer to so-called “tank bottoms,” a level at which oil becomes difficult to extract efficiently.
Despite the rapid depletion since March, Goldman noted global inventories remain broadly flat compared with a year earlier because countries had accumulated a “sizable buffer” in the nine months before the war.
The bank added that the start of the US summer travel season this weekend could add fresh pressure on fuel markets by lifting demand for gasoline, diesel and jet fuel.
(With inputs from Bloomberg)
