Global crude and product inventories could plummet by approximately 900 million barrels by the end of June, even if the recent ceasefire between the United States and Iran holds, according to Citi researchers. This projection, released on Monday, accounts for a 500 million-barrel drawdown already underway and an additional 400 million barrels expected due to production delays, logistical constraints, and lingering conflict damage.
The stark warning comes despite a ceasefire announcement by U.S. President Donald Trump on April 7, aimed at de-escalating tensions with Tehran. Yet, uncertainties loom large as traffic through the Strait of Hormuz—a critical chokepoint for global oil flows—remains largely halted. Oil prices surged 5% on Monday after the U.S. seized an Iranian cargo ship, stoking fears that the fragile truce could unravel.
Citi’s analysis paints an even grimmer picture if disruptions persist. A one-month extension of current Strait of Hormuz blockades could drive total inventory losses to 1.3 billion barrels, pushing Brent crude prices to $110 per barrel in the second quarter of 2026, before easing to $90 and $80 in the third and fourth quarters, respectively.
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A prolonged two-month disruption would be catastrophic, with losses ballooning to 1.7 billion barrels. Under this scenario, global inventories would hit their lowest levels in 25 years of recorded data, and Brent crude could spike to $130 per barrel by mid-2026.
“We are set to see crude and product inventories globally reach their lowest levels in 8 years by the end of June, even if the conflict ended this week,” Citi noted, highlighting the structural fragility of supply chains.
The potential for record-low stockpiles underscores the high stakes of maintaining stability in the region. With inventories already strained by 500 million barrels, any further delays in normalizing Strait of Hormuz flows could reshape energy markets for the remainder of 2026.
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