Brent crude rose to USD117.3/bbl (+USD15.3/bbl) as the market moved into a sharp supply deficit driven by escalating geopolitical tensions in the Middle East combined with infrastructure disruption, as well as sanctions constraining access to Russian and Iranian exports
- Global oil demand. Global oil demand rose to 103.2 MMb/d (+0.8 MMb/d). This was largely driven by an increase in demand in China (+0.6 MMb/d) which was in line with seasonal trends
- OPEC 8 production (excl. Iran, Venezuela, Libya) OPEC-8 output fell to 15.1 MMb/d (-1.7 MMb/d), driven by supply disruptions from the Strait of Hormuz blockage as a result of ongoing conflict impacting Saudi Arabia (-0.5 MMb/d) and Kuwait (-0.7 MMb/d). Additionally, UAE quit from OPEC and wider OPEC framework
- Non-OPEC production (excl. US shale) Non-OPEC production has increased by 1.9 MMb/d, to 67.3 MMb/d, as the UAE contributed 2.7 MMb/d. Meanwhile, Qatar is recovering from production decline after attacks on major oil and gas infrastructure caused massive disruptions
- US shale oil production. US shale output stood at 9.4 MMb/d, while active rigs decreased to 527 (-7 vs March)
- Iran, Venezuela, Libya production. The combined output from Iran, Venezuela, and Libya fell to 5.4 MMb/d, driven by Iran (-0.1 MMb/d) whereas Libya and Venezuela’s combined output increased by 0.1 MMb/d
- Commercial inventories.1 Global commercial inventories decreased by about 156 MMbbl in April to roughly 4.4 billion barrels, mainly driven by OECD (-106 MMbbl). Overall, OECD inventories have fallen around 72 million barrels below the five‑year seasonal April average
- Market sentiment. Oil sentiment remains bullish but fragile, underpinned by supply disruptions and falling inventories, yet vulnerable to a reversal if supply normalizes or demand softens. Ongoing risks to Strait flows and delayed restoration of damaged Middle East energy infrastructure continue to reinforce the tight supply backdrop
Non-OECD share of inventories is estimated, assuming that non-OECD inventories have 50% days of demand cover of OECD inventories