Global oil supplies are approaching a dangerous shortage. Goldman analysts see reserves already approaching the operating minimum.
• Iran conflict is massively driving up oil prices
• Goldman Sachs warns of a dangerous rate of reserve depletion
• Increased pressure on the refining sector
The situation on the energy market remains tense. While the war in the Middle East and the associated fears of delivery failures are driving up prices, the market has already reacted with massive price gains. The price of US WTI oil is currently trading at $101.20 per barrel, while North Sea Brent oil is trading at $95.42.
Geopolitics meets exhausted camps
In addition to the war-related risk premium, structural weakness is weighing on the market. As the financial portal Investing reports, citing a recent report by analysts at Goldman Sachs Commodities Research, stocks of specific regions and refined products are reaching critical lows. The experts emphasize that the current “speed of exhaustion” is undermining global security of supply as dwindling buffers make the system extremely vulnerable to war-related disruptions.
Threatening approach to eight-year low
The market data cited illustrates the tense situation: The total global oil stocks, which include both visible and invisible stocks of crude oil and refined products, currently amount to just 101 days of global demand (Days of Demand, DoD). Goldman Sachs forecasts a further decline to 98 days at the end of the current month of May, taking reserves to their lowest level in eight years. In a tight supply situation, geopolitical disruptions such as the ongoing Iran conflict could further inflate prices as shrinking reserves make the system extremely vulnerable. At a time of military conflict, this brings the global oil system dangerously close to the operational minimum of 30 to 40 days.
What raw materials investors need to know now
With Goldman Sachs explicitly warning of shortages of aviation fuel and naphtha, the efficiency of the refining sector is becoming the focus of attention. Investors are specifically looking at specialized operators who can optimize complex distillation processes under high cost pressure. Bottlenecks in Europe and Asia could lead to an increase in volatility for stocks such as TotalEnergies. At the same time, freight rates for oil tankers are expected to rise as war-related detours and regional imbalances put the maritime logistics chain under pressure.
Claudia Stephan, editorial team at finanzen.net
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