Oil inventories across OECD member states fell in May to their lowest level since 1990, according to the International Energy Agency (IEA), as governments drew down strategic reserves to offset supply disruptions linked to tensions in the Persian Gulf during the Middle East conflict.

The IEA reported that since the beginning of the crisis, stocks in OECD countries have dropped by around 163 million barrels. The agency noted that this decline has continued even as overall demand for crude oil and refined products has eased. ?Despite a significant decline in demand for crude oil and refined products, buffers in the system continue to be depleted at a record pace,? the report stated.

To stabilize markets after a sharp surge in prices triggered by disruptions around the Strait of Hormuz, the IEA coordinated the release of roughly 400 million barrels from emergency reserves. So far, 252 million barrels have already been released onto global markets as of June 12.

The agency added that the pace of these releases is expected to slow in June and July following recent developments aimed at de-escalating the conflict that escalated after US and Israeli strikes on Iran earlier this year.

Despite the temporary supply support, the IEA warned that elevated prices are likely to continue weighing on demand through the year. Oil consumption is projected to decline by 1.1 million barrels per day compared to 2025 levels.

Looking further ahead, the agency expects demand growth to rebound, forecasting an increase of about 2 million barrels per day in 2027. This recovery would be driven by improved economic conditions, lower prices, and the normalization of global trade flows.