Are global oil reserves sufficient to withstand renewed US-Iran war?
Oil prices have climbed to five-month highs as attacks on tankers in the Strait of Hormuz mount, raising concerns about global supply amid depleted emergency reserves.
Oil prices have climbed towards their highest levels in five months as attacks on tankers in and around the Strait of Hormuz mount and efforts to end the United States-Israel war on Iran are deadlocked. Brent crude, the international benchmark, rose by more than $2 to $110.85 a barrel on Wednesday, close to a five-month peak.
The escalation comes as the world's emergency oil stocks, already tapped heavily since the Iran war began on February 28, sit at their lowest levels in decades. The International Energy Agency (IEA) reported that its 32 members agreed to make 400 million barrels available from emergency supplies in March, more than double the volume released after Russia's full-scale invasion of Ukraine in 2022.
The US Strategic Petroleum Reserve has fallen to 283 million barrels, its lowest level since October 1982. Much of that oil was lent rather than sold and must be returned with extra barrels, according to the US Energy Information Administration.
Critical chokepoints under threat
In September, the Houthis seized territory in Yemen close to the Bab al-Mandeb strait, a critical chokepoint into and out of the Red Sea. Iran's Islamic Revolutionary Guard Corps recently claimed two tankers were 'set ablaze' after hitting mines in the Strait of Hormuz, followed by claims of hitting seven more vessels.
Before the war, about one-fifth of the world's oil and liquefied natural gas supplies, or roughly 20 million barrels of oil a day, passed through the Strait of Hormuz. Saudi Arabia has attempted to bypass Hormuz by increasing crude transport via the East-West Pipeline to its Red Sea port of Yanbu, but this route is also vulnerable.
If such attacks occur, the supply disruption could be even more severe and prolonged.
Depleted reserves leave little buffer
Aaron Kildow, a senior crude oil analyst at Sparta Commodities, estimated that global strategic stocks excluding China and Iran have fallen by nearly 327 million barrels since the end of December 2025, leaving only about 400 million barrels of usable reserves worldwide. Nearly half of these available stocks are in Japan, while Europe has about 76 million barrels uncommitted.
China's onshore crude stocks stand at 1.13 billion barrels, enough for about 80 days of refinery intake, while India's reserves cover just eight days of its imports. If both the Strait of Hormuz and Bab al-Mandeb were completely closed, the shortfall would be approximately 9.3 million barrels per day.
Europe is the real wildcard, both on timing and willingness.
Economic impact and winners
Experts warn that the depleted reserves would last only weeks if a full closure occurs.
Asian importers with thin reserves would feel the impact first, particularly India and Pakistan, whose nearest alternative supply from West Africa is 25 to 28 days away by sea. Meanwhile, oil producers far from the Gulf would benefit, with ExxonMobil reporting $14.5 billion in earnings in Q2, its highest in four years, while Chevron posted $12 billion, its best in six years.
US President Donald Trump has criticized companies like ExxonMobil and Chevron, stating they were 'making too much money based on a shortage.' A second major supply shock would send refiners scrambling for supplies from the US, Latin America, West Africa and Russia, potentially benefiting non-Middle Eastern producers with higher crude prices and lower transportation costs.
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