Goldman Says Oil Drawdowns Hit Record Pace as Buffer Shrinks

Storage tanks for oil products at the Exolum Corp SA facility in the port of Barcelona, Spain, on Thursday, April 30, 2026. After weeks of fuel inflation across Asia and Europe, higher pump prices are now starting to intensify in the US as war-driven energy shocks show little sign of abating. Photographer: Angel Garcia/Bloomberg Photo by Angel Garcia /Bloomberg

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(Bloomberg) — Global stockpiles of crude oil and products are being drawn down at a record pace this month as the war in the Middle East drags on, curtailing supplies, according to Goldman Sachs Group Inc.

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Visible inventories shrank by a record 8.7 million barrels a day so far in May, almost double the average pace since the conflict began, analysts including Yulia Zhestkova Grigsby and Daan Struyven said in a May 20 note.

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“Physical markets continue to tighten, as estimated oil exports through the strait remain at a very low 5% of normal,” they said, referring to the Hormuz waterway that’s subject to a double blockade by both Iran and the US.

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Global energy markets have been upended by the conflict, which has led to an unprecedented supply shock. That’s spurred the rapid drawdown of holdings accumulated before the crisis, while governments have also coordinated releases from strategic reserves in a bid to rein in price gains.

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International Energy Agency Executive Director Fatih Birol warned last week that commercial oil inventories were shrinking at an accelerated pace. The agency has also estimated that the market would remain “severely undersupplied” until October even if the conflict were to end soon.

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About two-thirds of the draws in May were driven by a drop in so-called oil on water, with declines in exports outpacing weaker imports, the Goldman analysts said. The import slump was “spreading from Asia to Europe,” they said, noting jet-fuel flows into Europe were 60% below 2025 averages.

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Still, although global stockpiles have drawn at a 4.6 million-barrel-a-day average pace since March, they are flat year-on-year given the buildup of a “sizable buffer” in the nine months before the war, they said.

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In China — the world’s largest crude importer — refineries were displaying “a lack of appetite” for crude, reflected in “large declines” in imports, they said. Local fuel sales sank 22% last month, partly due to weaker economic activity, they added, citing estimates from the bank’s economists.

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In the US, nationwide crude inventories, including the Strategic Petroleum Reserve, plunged by a record 17.8 million barrels last week, according to official data, as record exports start to erode holdings. Stockpiles at the Cushing, Oklahoma, hub continued to inch closer to so-called tank bottoms.

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“The US travel season starts this weekend, implying upcoming tailwinds for gasoline, diesel, and jet-fuel demand,” the analysts said.

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Brent futures traded near $106 a barrel on Thursday. While that’s more than 70% higher year-to-date, it’s well below the war-era peak above $126.

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