EIA sees OECD oil stocks falling below 2.3 billion barrels, a 2003 low

The forecast, published in the EIA's monthly Short-Term Energy Outlook and reported by the Financial Times, puts OECD stocks at just below 2.3 billion barrels by December. The agency expects Brent crude to average around $105 per barrel in the June and July spot market, well above the $91.60 per barrel seen in the futures market on Tuesday. That gap between spot and forward pricing is the clearest signal of how tight the physical market has become.

The mechanism is straightforward. The Iran conflict has halted roughly 11 million barrels per day of Middle Eastern production, and stockpiles are being drawn down to fill the gap. S&P Global noted the projection rests on the assumption that maritime traffic through the Strait of Hormuz, which carries 20% of global oil shipments, will not return to pre-conflict levels until early 2027. Reuters reported that news of a potential U.S.-Iran agreement to reopen the strait has weighed on prices, but the EIA was blunt: 'As of now, the agreement remains unfinalized. Most production in the region is still halted, and global oil inventories continue to decline to satisfy demand.'

What this means for UK buyers

Oil does not set your gas or power price directly, but it pulls hard on the whole forward complex. Sustained Brent strength feeds through to oil-indexed LNG cargoes, transport and logistics costs, and general inflation in supplier overheads. If you're running an oil-fired backup fleet or buying gasoil for on-site generation, the exposure is direct. For everyone else, the risk sits in forward curves staying elevated until inventories rebuild.

The chart below shows Brent over recent months, giving a sense of how far the $105 spot forecast sits above the levels buyers were pricing in before the conflict.

The figures to watch:

• OECD stocks against the 2.3 billion barrel projection
• The spot-to-futures gap (currently $105 forecast vs $91.60 forward)
• Strait of Hormuz transit volumes against pre-conflict levels
• The pace of Middle Eastern production restarts
• The EIA's demand forecast, now a 1.1 million barrels per day decline this year

That last point matters for magnitude. The agency had previously forecast demand growth of 200,000 barrels per day this year; it now expects the first annual decline since the pandemic downturn of 2020, driven by elevated prices, reduced fuel availability, and government conservation measures.

Watch the next Short-Term Energy Outlook for any revision to the early-2027 Hormuz assumption. If a U.S.-Iran agreement is finalised and traffic recovers sooner, the inventory rebuild starts earlier and the spot premium unwinds; if not, the EIA expects prices to 'stay high until global oil flows normalize and inventories are restored', and renewal pricing across the energy complex will reflect that.