The International Energy Agency warned in its monthly Oil Market Report released Wednesday, May 13, 2026, that global observed oil inventories fell at a record pace of around 4 million barrels per day in March and April — the steepest sustained draw in the agency’s tracking history. The IEA said in the report that with inventories already drawing sharply, further volatility is likely ahead of the peak summer demand season, and the market could remain severely undersupplied until October even if the conflict ends sooner.
The 4 million barrel per day inventory draw rate is structurally important. Roughly 9 to 10 million barrels per day of crude that would normally transit the Strait of Hormuz are not reaching global markets. With production cuts among Persian Gulf producers compounding the disruption, even substantial draws from commercial and strategic stocks have failed to bridge the supply gap. Cushing stocks remain below the five-year average; OECD commercial inventories have fallen for nine consecutive months.
The IEA’s warning about persistence is the most consequential element. By framing undersupply as “severe” through October even in a fast-resolution scenario, the agency is implicitly forecasting that the structural damage from the conflict will outlast the political settlement by months. Refinery turnaround scheduling, sourcing relationships, and trade flows are reconfiguring around the new reality faster than they could revert if a deal were reached tomorrow.
Asian refiners are leading the sourcing pivot. Reports Wednesday confirmed that Japanese, South Korean, and increasingly Chinese refiners are actively seeking alternatives to Persian Gulf crude — turning to West African grades, Latin American heavy sour streams, and U.S. WTI for replacement barrels. The shift is not just a temporary substitution: long-term contracts with Persian Gulf producers are being renegotiated or paused, and refiner-level configuration shifts to handle different crude slates take months once initiated.
The IEA also flagged the macro pass-through visible in April U.S. CPI data, which accelerated more than anticipated as surging energy prices linked to the Middle East crisis added meaningfully to price pressures. The report suggested that prolonged elevated crude prices through the summer would test central bank tolerance: Fed easing expectations could shift if the inflation pass-through proves persistent rather than transient.
Market reaction Wednesday was measured. WTI June futures slipped 0.3% to $101.85; Brent July futures eased 0.7% to $107.05 after a 7.6% three-day rally. The pullback suggests traders are now pricing the IEA framework as their base case rather than treating it as a downside scenario. Citi maintained its assessment that prices can rise further if dealmaking remains thorny. Kalshi prediction-market odds of WTI reaching $127 in 2026 held above 70%.
The next data point worth watching is the EIA’s Weekly Petroleum Status Report due later Wednesday, which has confirmed a 4.3 million barrel crude draw — nearly double consensus expectations. The combined IEA + EIA data drop tightens the supply-side narrative materially. For continuing coverage, see our live oil prices dashboard and geopolitics page.