Strait of Hormuz supply shock pushes global oil inventories toward critical levels

Global oil inventories are being depleted at a record pace as supply disruptions through the Strait of Hormuz threaten fuel security and broader economic stability ahead of peak summer demand, the International Monetary Fund, World Bank Group, International Energy Agency and World Trade Organization warned on Thursday.

 

The heads of the four institutions issued the warning after a high-level coordination meeting convened to assess the escalating economic, energy and trade fallout from the war in the Middle East.

 

The institutions said the conflict is generating “substantial and highly asymmetric impacts” on energy supplies, food security and economic activity, with vulnerable economies bearing the brunt through higher fuel and fertilizer prices, increased uncertainty and growing risks to jobs and livelihoods.

 

“At the same time, global oil inventories are being drawn down at a record pace in response to the major loss of supply through the Strait of Hormuz,” the institutions said in a joint statement.

 

They warned that if shipping flows through the critical waterway fail to normalize, continued rapid depletion of global oil stockpiles during the Northern Hemisphere’s peak summer demand season could heighten risks to fuel security, tighten market conditions and weaken global economic resilience.

 

The Strait of Hormuz remains one of the world’s most strategically important oil transit chokepoints, carrying a significant share of global crude exports. Any prolonged disruption threatens to intensify volatility across energy and financial markets while complicating inflation management efforts for central banks worldwide.

 

The institutions also flagged mounting concerns over fertilizer supply chains as many countries enter planting season, warning that elevated fertilizer costs could worsen food insecurity, particularly in import-dependent developing economies already struggling with high inflation and fragile fiscal conditions.

 

While noting that the global economy has so far shown resilience, the IMF, World Bank, IEA and WTO said they are closely monitoring policy responses and economic developments across affected regions.

 

The organizations said they discussed options for coordinated multilateral and bilateral support for countries most exposed to the shock and would continue working together to preserve global economic stability as the crisis evolves.

 

“We will remain in close contact as the situation evolves and continue coordinating our efforts to support the countries most affected and global economic stability,” they said.