Global oil traders have issued a collective warning that the international crude market, having lost the protective "cushion" of previous strategic stockpile releases, now faces a high-probability risk of supply and demand disruption. This follows the breakdown of a temporary US-Iran ceasefire and the forced closure of the Strait of Hormuz. Squeezed by escalating geopolitical conflict and urgent supply-side pressures, international oil prices experienced severe volatility this week, with London Brent crude futures rising for multiple consecutive days, posting a cumulative weekly gain of 11%.
The latest data from the International Energy Agency (IEA) reveals that nearly three-quarters of the 400 million barrels of emergency petroleum reserves released by its member states since March have been consumed, with remaining stocks only sufficient to support the market for a few more weeks. Industry analysts note that during the four-month closure of the strait following the previous US-Iran exchange of fire, Western and Asian nations barely kept the global energy supply chain operational through extreme measures like large-scale stockpile releases, halving imports, and depleting commercial inventories. This effort capped the price of Brent crude at $126 per barrel at that time. However, the current surplus of international crude inventories is now largely exhausted. Should the Strait of Hormuz remain closed long-term this time, numerous nations will face a severe situation with no oil to replenish stocks, as the market's risk resilience has plummeted to a nadir.
Beyond the structural paralysis threatening crude supply, the global refined products market is also in an extremely tight state due to multiple geopolitical conflicts. Intensive Ukrainian drone attacks on Russian refining facilities have significantly hampered supply from Russia, the world's second-largest diesel exporter, causing European wholesale diesel futures to surge 14% this week. Concurrently, the blockade of shipping lanes has interrupted exports from major Gulf jet fuel exporters like Kuwait, intensifying fuel shortage pressures on the international aviation industry during the peak summer demand period.
The security situation for alternative oil export routes from the Gulf region is also far from reassuring. Although Saudi Arabia has successfully diverted approximately 5 million barrels per day of exports through its Red Sea ports, countries such as Iraq and Kuwait remain heavily reliant on the Strait of Hormuz, with their exports almost completely halted. Compounding the crisis, Yemen's Houthi forces launched a new round of retaliatory attacks against Saudi Arabia following an assault on Sana'a International Airport. The market is deeply concerned that Red Sea shipping routes could once again face a complete shutdown. Should that occur, Saudi Arabia's sole alternative export route would be severed, potentially triggering even larger-scale systemic shocks in the global energy market.
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